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(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2003

100 Bloomfield Hills Parkway, Suite 300
Bloomfield Hills, Michigan 48304
(Address of principal executive offices) (Zip Code)

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 (X) 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. ( )

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). (X)

Aggregate market value of voting stock held by nonaffiliates of the registrant as of June 30, 2003: $2,477,924,686

Number of shares of common stock outstanding as of January 31, 2004: 125,426,644

Applicable portions of the Proxy Statement for the 2004 Annual Meeting of Shareholders are incorporated by reference in Part III of this Form.

Our internet website address is www.pulte.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to section 13(a) or 15(d) of the Exchange Act are available free of charge through our website as soon as reasonably practicable after we electronically file with or furnish them to the Securities and Exchange Commission. Our code of ethics for principal officers, our corporate governance guidelines and the charters of the Audit, Compensation, and Nominating and Governance committees of our Board of Directors, are also posted on our website and are available in print upon request.

Pulte Homes, Inc. is a publicly held holding company whose subsidiaries engage in the homebuilding and financial services businesses. Our assets consist principally of the capital stock of our subsidiaries, cash and investments. Our income primarily consists of dividends from our subsidiaries and interest on investments. Our direct subsidiaries include Pulte Diversified Companies, Inc., Del Webb Corporation (Del Webb) and other subsidiaries engaged in the homebuilding business. Pulte Diversified Companies, Inc.’s operating subsidiaries include Pulte Home Corporation, Pulte International Corporation (International) and other subsidiaries engaged in the homebuilding business. Pulte Diversified Companies, Inc.’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). We also have a mortgage banking company, Pulte Mortgage LLC (Pulte Mortgage), which is a subsidiary of Pulte Home Corporation.

We have two reportable business segments, Homebuilding and Financial Services, and one non-operating segment, Corporate. The Homebuilding segment consists of the following two business units:

	•		Domestic Homebuilding, our core business, is engaged in the acquisition and development of land principally for residential purposes within the continental United States and the construction of housing on such land targeted for the first-time, first and second move-up, and active adult home buyers.

	•		International Homebuilding is primarily engaged in the acquisition and development of land principally for residential purposes, and the construction of housing on such land in Mexico, Puerto Rico and Argentina.

The Financial Services segment consists principally of mortgage banking and title operations conducted through Pulte Mortgage and other subsidiaries.

Corporate is a non-operating segment that supports the operations of our subsidiaries by acting as the internal source of financing, developing and implementing strategic initiatives centered on new business development and operating efficiencies, and providing the administrative support associated with being a publicly traded entity listed on the New York Stock Exchange.

Financial information, including revenue, pre-tax income and total assets of each of our business segments is included in Note 2 of Notes to Consolidated Financial Statements.

Note:

Homebuilding settlement revenues of affiliates, not included in the table above, for the years ended December 31, 2003 through 1999 were $32,511, $40,723, $180,621, $148,798, and $162,926, respectively. Homebuilding unit settlements of affiliates, not included in the table above, for the years ended December 31, 2003 through 1999 were 149, 1,022, 7,258, 7,718, and 6,791, respectively.

Settlements (home sales) and net new orders (orders for homes net of cancellations) in any year are strongly influenced by local, regional and national market economic conditions. Backlog (homes that have been ordered but not completed and sold) at any period is strongly influenced by local, regional and national market economic conditions.

We build a wide variety of homes, including single family detached units, townhouses, condominiums and duplexes, with varying prices, models, options and lot sizes. Since 1990, we have more than quadrupled our annual unit closings, unit orders and unit backlog levels. Including 2003 settlements of nearly 33,000 homes, we have closed more than 370,000 homes since our inception.

On July 31, 2001, we merged with Del Webb in a tax-free stock-for-stock transaction. Del Webb was primarily a homebuilder with operations in seven states. For the fiscal year ended June 30, 2001, Del Webb reported net income of $91.2 million on revenues of $1.9 billion and 7,038 unit settlements. Backlog reported at June 30, 2001, was 3,682 units valued at approximately $994 million. This merger expanded and supported our leadership position. In particular, we believe the merger strengthened our position among active adult (55 and better) homebuyers, added important strategic land positions, provided operational savings from economies of scale, bolstered our purchasing leverage, and enhanced our overall competitive position. In accordance with our operational strategy, we will continue to evaluate available strategic acquisition opportunities that are consistent with our long-range goals.

As of December 31, 2003, our Domestic Homebuilding operations offered homes for sale in 535 communities at sales prices ranging from $80,000 to $2,300,000. Sales prices of homes currently offered for sale in 75% of our communities fall within the range of $100,000 to $350,000 with a 2003 average unit selling price of $259,000. Sales of single-family detached homes, as a percentage of total unit sales, were 83% in 2003, 86% in 2002, and 82% in 2001. Our Domestic Homebuilding operations are geographically diverse and, as a result, better insulate us from demand changes in individual markets. As of December 31, 2003, our Domestic Homebuilding business operated in 44 markets spanning 27 states.

As of December 31, 2003, our Domestic Homebuilding operations had 13,952 units in backlog valued at approximately $4.1 billion.

Our International Homebuilding operations are principally conducted through subsidiaries of International in Mexico, Puerto Rico and Argentina. International Homebuilding product offerings focus on the demand of first-time buyers and middle-to-upper income consumer groups. Effective January 1, 2002, International reorganized its structure within Mexico to create a single company, Pulte Mexico S. de R.L. de C.V., which ranks as one of the largest builders in the country. Prior to the reorganization, these operations were conducted primarily through five joint ventures throughout Mexico. Under the new ownership structure, which combines the largest of these entities, we own 63.8% of Pulte Mexico S. de R.L. de C.V. and have consolidated Pulte Mexico S. de R.L. de C.V. into our financial statements.

We are currently in the process of evaluating various long-term strategic alternatives with regard to our International operations.

We select locations for development of homebuilding communities after completing extensive market research, enabling us to match the location and product offering with our targeted consumer group. We consider factors such as proximity to developed areas, population and job growth patterns and, if applicable, estimated development costs. We historically have managed the risk of controlling our land positions through use of option contracts and outright acquisition. We typically control land with the intent to complete sales of housing units within 24 to 36 months from the date of opening a community, except in the case of certain active adult developments and our Del Webb operations for which the completion of community build out requires a longer time period due to typically larger project sizes. As a result, land is generally purchased after it is properly zoned and developed or is ready for development. In addition, we dispose of owned land not required in the business through sales to appropriate end users. Where we develop land, we engage 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. We use our staff and the services of independent engineers and consultants for land development activities. Land development work is performed primarily by independent contractors and local government authorities who construct sewer and water systems in some areas. At December 31, 2003, we controlled approximately 257,000 lots, of which 120,000 were owned and 137,000 were under option agreements.

We are dedicated to improving the quality and value of our 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, we segment our potential customers into well-defined buyer profiles. Segmentation analysis provides a method for understanding the business opportunities and risks across the full spectrum of consumer groups in each market. Once the demands of potential buyers are understood, we link our home design and community development efforts to the specific lifestyle of each targeted consumer group.

To meet the demands of our various domestic customers, we have established a solid design expertise for a wide array of product lines. We believe that we are an innovator in the design of our homes and we view design capacity as an integral aspect of our marketing strategy. Our 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. In certain markets our strategy 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 variety of available flooring and carpet.

Typically, our domestic sales teams, together with outside sales brokers, are responsible for guiding the customer through the sales process. We are 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 our homes and their distinctive design features. We have 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 our mortgage company. We also enjoy strong sales to the move-up buyer and, in certain markets, offer semi-custom homes in higher price ranges.

As a result of the Del Webb merger, we are better able to address the needs of active adults, the fastest growing homebuying segment. With destination communities offering highly amenitized products such as golf courses, recreational centers and educational classes, the active adult buyer has many options to maintain an active lifestyle.

In 2003, our Dallas, Houston, Las Vegas, Minneapolis/St. Paul, San Francisco Bay Area, Phoenix, Raleigh/Durham, Sacramento, Southern California, Tampa, Tucson, and Palm Beach markets were recognized for ranking the highest in their markets in a national customer satisfaction study. The survey of twenty-one U. S. markets noted customer service and home readiness as the two factors that most heavily influenced the customer’s overall level of satisfaction. We ranked third or better in seventeen of the twenty-one markets surveyed. Building on this quality foundation is our brand development program with our “Three I’s on Quality” (Involvement, Integrity, and Innovation) platform. Developing the Pulte Homes brand and leveraging the strength of the “DiVosta,” “Del Webb” and “Sun City” tradenames helps to distinguish our communities from the competition, and can often be rewarded with the advantages of additional sales pace, choice community locations, and reduced overall customer acquisition costs.

In addition, our Homeowner for Life™ strategy and philosophy has increased our business from those who have previously owned a Pulte home or have been referred by a Pulte homeowner by ensuring a positive home buying and home owning experience. We introduce our homes to prospective buyers through a variety of media advertising, illustrated brochures, Internet listings and link placements, and other advertising displays. In addition, our websites, www.pulte.com, www.delwebb.com, and www.divosta.com provide tools to help users find a home that meets their needs, investigate financing alternatives, communicate moving plans, maintain a home, learn more about us and communicate directly with us. Approximately three million potential customers visited our websites during 2003.

Our international sales and marketing efforts focus on the identification of underserved market demand, particularly in Argentina and Puerto Rico, with strong emphasis on quality initiatives and customer service. In Mexico, where our product is focused largely on social interest housing, sales and marketing efforts target areas experiencing population and employment (industrialization) growth.

The construction process for our domestic homes begins with the in-house design of the homes we sell. The building phase is conducted under the supervision of our on-site construction superintendents. The construction work is usually performed by independent contractors under contracts that, in many instances, cover both labor and materials on a fixed-price basis. We believe that Pulte Preferred Partnerships (P³), an extension of our quality assurance program, continues to establish new standards for contractor relations. Using a selective process, we have teamed up with what we believe are premier contractors and suppliers to improve all aspects of the land development and house construction processes.

We maintain 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 contracting and purchasing of building supplies and materials generally is negotiated at or near the time when related sales contracts are signed. In addition, we leverage our size by actively negotiating our materials needs on a national or regional basis to minimize production component cost. We are also working to establish a more integrated system that can effectively link suppliers, contractors and the production schedule through various strategic business partnerships and e-business initiatives.

Housing in Mexico and Puerto Rico 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. Our housing product in Argentina is designed and constructed in a similar fashion to our domestic product but is customized for local preferences. Building materials, supplies and components are sourced locally and the construction work is performed by general contractors and/or independent contractors, which in many cases include both labor and materials.

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

Our dedication to customer satisfaction is evidenced by our consumer and value-based brand approach to product development, and is something that we believe distinguishes us in the homebuilding industry and contributes to our long-term competitive advantage. The housing industry in the United States, however, is highly competitive. In each of our market areas, there are numerous homebuilders with which we compete. We also compete with the resales of existing house inventory. Any provider of housing units, for-sale or to rent, including apartment builders, may be considered a competitor. Conversion of apartments to condominiums further provides certain segments of the population an alternative to traditional housing, as does manufactured housing. We compete primarily on the basis of price, reputation, design, location and quality of our homes. The housing industry 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; (6) changes in government mortgage financing programs, and (7) availability of sufficient mortgage capacity. In addition to these factors, our business and operations could be affected by shifts in demand for new homes.

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

We conduct our financial services business, which includes mortgage and title operations, through Pulte Mortgage and other subsidiaries.

Our mortgage bank arranges financing through the origination of mortgage loans primarily for the benefit of our domestic homebuyers, but also services the general public. We also engage in the sale of such loans and the related servicing rights. We are a lender approved by the FHA and VA and are 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 our conventional mortgage lending activities we follow underwriting guidelines established by FNMA and FHLMC.

Our mortgage underwriting, processing and closing functions are centralized in Denver, Colorado using a mortgage operations center (MOC) concept. We also use a centralized telephone loan officer concept where loan officers are centrally located at a mortgage application center (MAC) in Denver. Our sales representatives, who are the mortgage customers’ main contact, forward the loan applications to a MAC loan counselor who calls the customer to complete the loan application and then forwards it to the MOC for processing. We believe both the MOC and the MAC improve the speed and efficiency of our mortgage operations, thereby improving our profitability and allowing us to focus on creating attractive mortgage financing opportunities for our customers.

In originating mortgage loans, we initially use our own funds and borrowings made available to us through various credit arrangements. Subsequently, we sell such mortgage loans and mortgage-backed securities to outside investors.

Our capture rate for the years ended December 31, 2003, 2002, and 2001 was approximately 83%, 78%, and 74%, respectively. Our capture rate represents loan originations from our homebuilding business as a percent of total loan opportunities, excluding cash settlements, from our homebuilding business. During the years ended December 31, 2003, 2002 and 2001, we originated mortgage loans for approximately 73%, 68% and 67%, respectively, of the homes we sold domestically. Such originations represented 83%, 85% and 81%, respectively, of our originations.

We sell our servicing rights on a flow basis through fixed price servicing sales contracts to reduce the risks inherent in servicing loans. This strategy results in owning the servicing rights for only a short period of time, generally less than four months after the loan is originated, which substantially reduces the risk of impairment with respect to the fair value of these reported assets. The servicing sales contracts provide for the reimbursement of payments made when loans prepay within specified periods of time, usually 90 days after sale or securitization.

The mortgage industry in the United States is highly competitive. We compete with other mortgage companies and financial institutions to provide attractive mortgage financing to both our homebuyers and to the general public. The Internet is also an important resource for homebuyers in obtaining financing as a number of companies provide online approval for their customers. These Internet-based mortgage companies may also be considered competitors.

In originating and servicing mortgage loans, we are subject to rules and regulations of the FHA, VA, GNMA, FNMA and FHLMC. In addition to being affected by changes in these programs, our mortgage banking business is also affected by several of the same factors that impact our homebuilding business.

During the first quarter of 1994, we adopted a plan of disposal for First Heights and announced our strategy to exit the thrift industry and increase our 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 in 1994, we 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 us from completing the disposal in accordance with our 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 was collateralized by the FRF notes. The LAN and FRF notes matured in September 1998; however, payment of these obligations was withheld by both parties pending resolution of all open matters with the FDIC. As discussed in Item 3, we settled the litigation with the FDIC in October 2001, and as part of that settlement all obligations under the LAN and FRF notes were extinguished.

First Heights’ day-to-day activities are principally devoted to supporting residual regulatory compliance matters and the litigation with the United States government, discussed in Item 3, 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 presented as discontinued.

Corporate is a non-operating segment that is comprised primarily of Pulte Homes, Inc. and Pulte Diversified Companies, Inc., both of which are holding companies. The primary purpose of Corporate is to support the operations of our subsidiaries by acting as the internal source of financing, developing and implementing 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 entity 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.

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, 2003, we employed approximately 10,800 persons. Our employees are not represented by any union. Contracted work, however, may be performed by union contractors. 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 business unit or subsidiary. Our corporate management personnel are paid incentive compensation based on our overall performance. Each subsidiary is given autonomy regarding employment of personnel, although our senior corporate management acts in an advisory capacity in the employment of subsidiary officers. We consider our employee and contractor relations to be satisfactory.

Our homebuilding and corporate headquarters are located at 100 Bloomfield Hills Parkway, Suite 300, Bloomfield Hills, Michigan 48304, where we lease 63,740 square feet of office space. We also lease 37,004 square feet of office space at 15333 N. Pima Rd., Suite 300/340/345, Scottsdale, Arizona 85250 and 41,208 square feet of office space at 1230 West Washington Street, Tempe, Arizona 85281 for certain corporate and business services. Pulte Mortgage’s offices are located at 7475 South Joliet Street, Englewood, Colorado 80112 and 99 Inverness Drive East, Englewood, Colorado 80112. We lease approximately 61,436 square feet and 32,000 square feet, respectively, of office space at these locations. Our homebuilding markets and mortgage 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 our homebuilding operations, significant amounts of property are held as inventory in the ordinary course of our homebuilding business. Such properties are not included in response to this Item.

We are involved in various litigation incidental to our continuing business operations. We believe that none of this litigation will have a material adverse impact on our results of operations, our financial position or our cash flows.

We were 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 Pulte Homes, Inc., Pulte Diversified Companies, Inc. 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 was obligated to pay First Heights on two promissory notes which had been executed by the FDIC’s predecessor, the FSLIC.

In the District Court Case, the FDIC, as successor to the FSLIC, sought a declaration of rights and other relief related to the Assistance Agreement entered into between First Heights and the FSLIC. The FDIC and the Pulte Parties disagreed 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 included certain other claims relating to the foregoing, including claims resulting from our amendment and First Heights’ amendment of a tax sharing and allocation agreement between us and First Heights. The Pulte Parties disputed the FDIC’s claims and filed an answer and a counterclaim, seeking, among other things, a declaration that the FDIC had 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.

In October 2001, the FDIC and the Pulte Parties settled the District Court Case, the related appeal to the Sixth Circuit Court of Appeals and the third lawsuit. As part of this settlement (the Settlement), the First Heights Assistance Agreement was terminated, except that certain tax benefit sharing provisions will continue in effect, and the warrants issued by First Heights to the FDIC were extinguished. We do not believe that the claims in the Court of Federal Claims Case are in any way prejudiced by the Settlement.

In the Court of Federal Claims Case, 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 (OBRA). 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 other claims concerning the contract, including that the United States (through the FDIC as receiver) 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 for which they had contracted.

On August 17, 2001, the United States Court of Federal Claims ruled that the United States government is liable to the Pulte Parties for breach of contract by enacting Section 13224 of OBRA. In September 2003, the United States Court of Federal Claims issued final judgment that the Pulte Parties have been damaged by approximately $48.7 million as a result of the United States government’s breach of contract with them. The United States government and the Pulte Parties filed Notices of Appeal with the United States Court of Appeals for the Federal Circuit in October 2003. Accordingly, any gain related to this litigation will be recognized only upon final resolution.

The following is a brief account of the business experience of each officer during the past five years:

Mr. Pulte was appointed Chairman of the Board in December 2001. He has also served as Chairman of the Executive Committee of the Board of Directors since January 1999.

Mr. Dugas was appointed President and Chief Executive Officer in July 2003. Prior to that date, he served as Executive Vice President and Chief Operating Officer. He was appointed Chief Operating Officer in May 2002 and Executive Vice President in December 2002. Since 1994, he has served in a variety of management positions. Most recently, he was Coastal Region President with responsibility for our Georgia, North Carolina, South Carolina, and Tennessee operations.

Mr. Petruska was appointed Executive Vice President and Chief Operating Officer in January 2004. Since joining our company in 1984, he has held a number of management positions. Most recently, he was the President for both the Arizona Area and Nevada Area operations.

Mr. Cregg was appointed Executive Vice President in May 2003 and was named Chief Financial Officer effective January 1998.

Mr. Taylor was appointed Executive Vice President, Human Resources, in May 2003. Prior to that date, he was Vice President of Human Resources and Sales Development since 1997.

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. Robinson was appointed Treasurer in July 1998 and was named Vice President and Treasurer effective January 1999.

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

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common shares are listed on the New York Stock Exchange (Symbol: PHM). The table below, which has been adjusted to retroactively reflect our two-for-one stock split announced December 11, 2003 and effected January 2, 2004, sets forth, for the quarterly periods indicated, the range of high and low closing prices and cash dividends declared per share.

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 our Consolidated Financial Statements and Notes thereto included elsewhere in this report.

(a)		Del Webb operations were merged effective July 31, 2001.

(b)		All share and per share amounts have been restated to retroactively reflect the two-for-one stock split announced on December 11, 2003 and effected January 2, 2004.

(a)		Total net new orders-units for the years ended December 31, 2003 and 2001, do not include 1,051 units and 3,953 units, respectively, of acquired backlog.

(b)		Domestic homebuilding interest expense, which represents the amortization of capitalized interest, has been reclassified to home cost of sales.

(c)		Homebuilding unit settlements of affiliates, not included in the table above, for the years ended December 31, 2003 through 1999 were 149, 1,022, 7,258, 7,718, and 6,791, respectively.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

A summary of our operating results by business segment for the years ended December 31, 2003, 2002, and 2001 is as follows ($000’s omitted, except per share data):

A comparison of pre-tax income (loss), for the years ended December 31, 2003, 2002, and 2001 is as follows:

	•		Continued strong demand for new housing, the addition and expansion of the Del Webb branded communities, coupled with our ability to effectively manage selling price and pace through our unique segmentation strategy drove pre-tax income of our homebuilding business segment to increase 38% in 2003 and 41% in 2002. Domestic average unit selling price increased by 7% in 2003 and 8% in 2002. Additionally, domestic gross margin percentages from home sales were up 120 basis points in 2003 principally as a result of product price increases and market and product mix shifts. Compared to 2001, our 2002 domestic gross margin percentages were up 30 basis points principally as a result of purchase accounting adjustments recorded in 2001.

	•		Pre-tax income of our financial services business segment increased 3% in 2003 and 81% in 2002. The increase in 2003 was primarily driven by an increase in loan originations and a higher capture rate tempered by a less favorable interest rate environment during the last half of the year. The 2002 increase was a result of increased volume, a favorable interest rate environment, effective leverage of overhead costs and the addition of Del Webb mortgage operations.

	•		Pre-tax loss of our non-operating corporate segment increased 22% in 2003 to $75.4 million principally from higher compensation-related costs. The pre-tax loss in 2002 increased 8% as a result of higher interest costs, related to an increase in debt levels to support the growth of the business.

During the third quarter of 2003 and 2002, we recorded non-cash, after-tax gains of $7.9 million and $10.0 million, respectively, related to the favorable resolution of certain tax matters relating to our thrift operation, which we discontinued in 1994.

	•		Domestic Homebuilding - We conduct our Domestic Homebuilding operations in 44 markets located throughout 27 states. Domestic Homebuilding offers a broad product line to meet the needs of the first-time, first and second move-up, and active adult homebuyers.

	•		International Homebuilding - We conduct our International Homebuilding operations through subsidiaries of Pulte International Corporation (International) in Mexico, Puerto Rico and Argentina. International Homebuilding product offerings focus on the demand of first-time buyers and middle-to-upper income consumer groups. We are currently in the process of evaluating various long-term strategic alternatives with regard to our International operations.

Certain operating data relating to our homebuilding operations are as follows ($000’s omitted):

Note:

Homebuilding revenues of affiliates, not included in the table above, for the years ended December 31, 2003 through 2001 were $32,511, $40,723, and $180,621, respectively. Homebuilding unit settlements of affiliates, not included in the table above, for the years ended December 31, 2003 through 2001 were 149, 1,022, and 7,258, respectively.

The Domestic Homebuilding operations represent our core business. We conduct our operations in 44 markets, located throughout 27 states, presented geographically as follows:

The greater Phoenix market accounted for 11% of Domestic Homebuilding settlement revenues, 12% of settlement units and 14% of net new orders in 2003. The Las Vegas market accounted for 10% of net new orders in 2003. For the year ended December 31, 2002, the greater Phoenix market accounted for 10% of Domestic Homebuilding settlement revenues, 11% of settlement units and 11% of net new orders. No other individual markets represented more than 10% of total Domestic Homebuilding settlement revenues, settlement units or net new orders during the three years ended December 31, 2003.

The following table presents selected unit information for our Domestic Homebuilding operations:

(a)

Net new orders for the years ended December 31, 2003 and 2001, do not include 1,051 units and 3,953 units, respectively, of acquired backlog and related dollars.

Unit settlements in 2003 reached a record high, increasing 13% to 32,693 units. The increase in 2003 can be attributed to continued strong demand for new housing and an increase in the active communities to 535 from 460. Unit settlements in 2002 increased 26% to 28,903 units, principally from the inclusion of a full year of Del Webb operations combined with strong sales in the Midwest. The average selling price for our homes increased from $225,000 in 2001 to $242,000 in 2002 and to $259,000 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. Both 2003 and 2002 benefited from increased product prices and improved product mix.

Ending backlog, which represents orders for homes that have not yet closed, climbed 32% to 13,952 homes. The dollar value of our ending backlog was up 45% to $4.1 billion at December 31, 2003. Unit and dollar backlog at December 31, 2002, increased 22% and 35%, respectively, to 10,605 homes valued at $2.9 billion. Overall, strong demand supported by a favorable interest rate environment and an increase in the number of active communities drove increased order activity and record levels of backlog.

The following table presents a summary of pre-tax income for our Domestic Homebuilding operations ($000’s omitted):

Domestic homebuilding interest expense, which represents the amortization of capitalized interest, has been reclassified to home cost of sales.

Gross profit margins from home sales in 2003 increased 120 basis points over 2002 to 20.6%. Gross profit margins in 2002 increased 30 basis points to 19.4%. Factors that contributed to this favorable trend include strong customer demand, positive home pricing, the benefits of leverage-buy purchasing activities and effective production and inventory management. In addition, 2001 gross profit margins were negatively impacted 20 basis points as a result of purchase accounting adjustments.

Land sales increased in each of the prior three years, demonstrating our competency in purchasing, developing and entitling certain land positions for sale primarily to other homebuilders, as well as to retail and commercial establishments. Revenues and their related gains/losses may vary significantly between periods, depending on the timing of such sales. We continue to rationalize certain existing land positions to ensure the most effective use of invested capital. Included in other assets is approximately $251.2 million in land held for disposition as of December 31, 2003, as compared to $218.8 million in the prior year.

For the year ended December 31, 2003, selling, general and administrative expenses, as a percentage of home settlement revenues, increased 20 basis points to 9.7% after increasing 10 basis points to 9.5% in 2002. The increase in 2003 is principally attributable to costs associated with the realignment of our field operations and organizations to meet the challenge and opportunity for future growth. Higher startup costs for new communities and increased compensation related costs partially offset by a reduction in costs associated with the Del Webb operations contributed to the change in 2002.

Other income (expense), net totaled income of $3.4 million in 2003 compared to expense of $23.0 million in 2002. This favorable change was principally a result of equity earnings from two Nevada-based joint ventures, totaling $28.5 million, related to the sale of commercial and residential properties. Other expense, net of $16.9 million in 2001 benefited from income from certain non-operating investments totaling $4.2 million.

At December 31, 2003 and 2002, our Domestic Homebuilding operations controlled approximately 256,900 and 176,800 lots, respectively. Approximately 120,400 and 84,300 lots were owned, and approximately 66,000 and 43,800 lots were under option agreements approved for purchase at December 31, 2003 and 2002, respectively. In addition, there were approximately 70,500 lots under option agreements at December 31, 2003, pending approval, that are under review and evaluation for future use by our Domestic Homebuilding operations. This compared to 48,700 lots at December 31, 2002.

The total purchase price applicable to approved land under option for use by our homebuilding operations at future dates approximated $2.6 billion at December 31, 2003. In addition, total purchase price applicable to land under option pending approval was valued at $2.1 billion at December 31, 2003. Land option agreements, which may be cancelled at our discretion, may extend over several years and are secured by deposits totaling $99.0 million, which are generally non-refundable.

Our International Homebuilding operations are primarily conducted through subsidiaries of International in Mexico, Puerto Rico and Argentina. Effective January 1, 2002, we reorganized the structure of our operations within Mexico to create a single company, Pulte Mexico S. de R.L. de C.V. , which ranks as one of the largest builders in the country. Prior to the reorganization, these operations were conducted primarily through five joint ventures throughout Mexico. Under the new ownership structure, which combines the largest of these entities, we own 63.8% of Pulte Mexico S. de R.L. de C.V. and have consolidated Pulte Mexico S. de R.L. de C.V. into our financial statements. Results for 2002 include joint venture operations for one month and operations as a consolidated entity for eleven months, as the operations in Mexico report on a one-month lag.

We are currently in the process of evaluating various long-term strategic alternatives with regard to our International operations.

The following table presents selected financial data for our International Homebuilding operations for the years ended December 31, 2003, 2002 and 2001 ($000’s omitted):

Note:

Homebuilding unit settlements of affiliates, not included in the table above, for the years ended December 31, 2003, 2002, and 2001 were 149, 1,022, and 7,258, respectively.

International revenues and unit settlements for 2003 benefited from a full year of results from our operations in Mexico as well as increased sales in both Argentina and Puerto Rico. Our Mexico operations had revenues of $172.3 million and unit settlements of 6,777 for the year ended December 31, 2003. Increased revenues and settlements in 2002 were due to consolidation of the operations in Mexico for eleven months of 2002, a full year of closings in Argentina, which recorded its first closing in June of 2001, partially offset by a decline in Puerto Rico. Our operations in Mexico contributed revenues of $158.1 million and unit settlements of 6,271 units in 2002.

Gross profit margins from home sales declined 20 basis points to 19.7% in 2003 compared to 2002, as favorable product and geographic mix shifts in Mexico were offset by less favorable product mix shifts in Puerto Rico and unfavorable sales pace in Argentina. The consolidation of Mexico had a positive effect on 2002 gross margins, increasing to 19.9% from 12.0% in 2001.

Selling, general and administrative expenses as a percent of revenue increased by 60 basis points to 18.5% in 2003 from 17.9% in 2002. This increase was driven by additional costs incurred reorganizing our operations in Mexico in an effort to enhance future profitability. Aggressive marketing efforts in Argentina, coupled with limited reorganization costs and a stronger peso, also contributed to the increase.

Our operations in Argentina and Mexico are affected by fluctuations in currency rates for those countries. Transaction gains and losses for the years ended December 31, 2003, 2002 and 2001, classified as other income (expense), net, were not significant. For the years ended December 31, 2003 and 2002, we recorded a foreign currency translation gain of $1.9 million and a loss of $12.8 million, respectively, for Argentina and a translation loss of $5.9 million and a gain of $8.6 million for Mexico, as a component of accumulated other comprehensive income on the balance sheet. At December 31, 2003, our investment in Argentina and Mexico, net of accumulated foreign currency translation adjustments, approximated $13.2 million and $65.8 million, respectively.

We conduct our financial services business, which includes mortgage and title operations, through Pulte Mortgage and other subsidiaries.

We sell our servicing rights on a flow basis through fixed price servicing sales contracts. Due to the short period of time the servicing rights are held, generally less than four months, we do not amortize the servicing asset. Since the servicing rights are recorded based on the value in the servicing sales contracts, there are no impairment issues related to these assets. We also originate mortgage loans using our own funds or borrowings made available through various credit arrangements, and then sell such mortgage loans to outside investors.

The following table presents mortgage origination data for our Financial Services operations:

Mortgage origination unit and principal volume for the year ended December 31, 2003, increased 24% and 32%, respectively, over 2002. This growth can be attributed to an increase in the capture rate of 510 basis points to 82.7% combined with the volume increases experienced in our Homebuilding business and an increase in average loan size. Our capture rate represents loan originations from our homebuilding business as a percent of total loan opportunities, excluding cash settlements, from our homebuilding business. Mortgage origination principal volume in 2002 increased 28% over 2001, due to an increase in the capture rate of 390 basis points to 77.6% and the inclusion of Del Webb mortgage operations for a full year. Origination unit volume increased 21% due to the same factors. Our home buying customers continue to account for the majority of total loan production representing 83% of total Pulte Mortgage unit production for 2003, compared with 85% in 2002 and 81% in 2001. Refinancings represented 8% of total loan production in 2003 and 2002, and 10% during 2001. At December 31, 2003, loan application backlog increased 57% to $2.2 billion as compared to $1.4 billion and $0.8 billion at December 31, 2002 and 2001, respectively.

Pre-tax income for the year ended December 31, 2003, increased 3% to $68.8 million, as a result of increased volume, partially offset by the impact of a less favorable interest rate environment for selling loans during the last six months of the year and an increase in training, systems, and facilities costs incurred in anticipation of the projected growth of the business. Gains from the sale of mortgages increased $2.0 million, or 3%, from the same period in 2002. As compared with 2002, net interest income increased $3.8 million to $15.1 million during 2003 due to increased production. Income from our title operations was $13.5 million in 2003, an increase of 11% over 2002.

Pre-tax income for the year ended December 31, 2002, increased 81% to $66.7 million, as a result of increased volume, a favorable interest rate environment, effective leverage of overhead costs and the inclusion of Del Webb mortgage operations for a full year. Gains from the sale of mortgages increased $20.4 million, or 49%, from the same period in 2001. As compared with 2001, net interest income increased $6.3 million to $11.3 million during 2002 due to increased production and a steeper yield curve as a result of the drop in interest rates during 2002. Title income grew 42% contributing $12.2 million to pre-tax income for the year.

We hedge portions of our forecasted cash flow from sales of closed mortgage loans with derivative financial instruments. For the year ended December 31, 2003, we did not recognize any net gains or losses related to an ineffective portion of the hedging instrument. We also did not recognize any gains or losses during 2003, for cash flow hedges that were discontinued because it is probable that the original forecasted transaction will not occur. At December 31, 2003, we expect to reclassify $0.2 million, net of taxes, of net losses on derivative instruments from accumulated other comprehensive income to earnings during the next twelve months from sales of closed mortgage loans.

Corporate is a non-operating segment that supports the operations of our subsidiaries by acting as the internal source of financing, developing and implementing strategic initiatives centered on new business development and operating efficiencies, and providing the necessary administrative support associated with being a publicly traded entity listed on the New York Stock Exchange. 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 ($000’s omitted):

Interest expense, net of interest capitalized into inventory, increased 3% to $39.4 million in 2003 and 12% to $38.2 million in 2002. This trend is a result of an increase in debt levels necessary to support our growth. Interest incurred for the years ended December 31, 2003, 2002, and 2001, excluding interest incurred by our financial services operations, was approximately $179.0 million, $162.5 million and $116.9 million, respectively.

Other corporate expense, net in 2003 increased $12.2 million principally as a result of higher compensation-related costs. Over the two-year period ended December 31, 2002, other corporate expenses, net were relatively flat, as higher compensation-related costs were offset by income from the sale and adjustment to fair value of various non-operating parcels of commercial land held for sale.

Interest capitalized into inventory is charged to home cost of sales based on the cyclical timing of our unit settlements, over a period that approximates the average life cycle of our communities. Interest in inventory, has increased primarily as a result of higher levels of indebtedness and the addition of the Del Webb properties, which have a longer life cycle. Information related to Corporate interest capitalized into inventory is as follows ($000’s omitted):

In September 2003, the United States Court of Federal Claims issued final judgment that Pulte Homes, Inc., Pulte Diversified Companies, Inc. and First Heights (collectively, the Pulte Parties) had been damaged by approximately $48.7 million as a result of the United States government’s breach of contract with them. The final judgment follows the Court’s August 17, 2001 ruling that the United States breached the contract related to the Pulte Parties’ 1988 acquisition of five savings and loan associations by enacting Section 13224 of the Omnibus Budget Reconciliation Act of 1993. The United States government and the Pulte Parties filed Notices of Appeal with the United States Court of Appeals for the Federal Circuit in October 2003. Accordingly, any gain related to this litigation will be recognized only upon final resolution.

Our net cash used in operating activities for the year ended December 31, 2003 totaled $301.8 million. The increase in net income was offset by significant investments in land necessary to support the continued growth of the business. Net cash used in investing activities was $34.1 million for 2003. Net cash provided by financing activities for the year ended December 31, 2003, was $128.9 million, reflecting proceeds from the $300 million senior notes issued in February and the $400 million senior notes issued in May and proceeds from employee stock option exercises, offset by the repayment of debt, dividends paid and stock repurchases.

Our net cash provided by operating activities for the year ended December 31, 2002, was $148.8 million. The increase in net income was aided by the realization of certain tax benefits and an increase in accrued liabilities, while inventories continued to build to support the growth of the business. Net cash provided by investing activities was $21.5 million for 2002. Net cash provided by financing activities for the year ended December 31, 2002, was $374.0 million, reflecting proceeds from the $300 million senior notes issued in June 2002, proceeds from borrowings under our various credit facilities and proceeds from employee stock option exercises, offset by the repayment of debt, dividends paid and stock repurchases.

We finance our homebuilding land acquisitions, development and construction activities from internally generated funds and existing credit agreements. Effective October 1, 2003, we replaced our $570 million revolving credit facility with an $850 million facility that includes the capacity to issue letters of credit up to $500 million. This new credit facility expires October 1, 2008. We had no borrowings under our unsecured revolving credit facility at December 31, 2003.

Pulte Mortgage provides mortgage financing for many of our home sales and uses its own funds and borrowings made available pursuant to various committed and uncommitted credit arrangements. Pulte Mortgage has committed credit arrangements of $860 million comprised of a $310 million bank revolving credit facility and a $550 million annual asset-backed commercial paper program. There were approximately $479.3 million of borrowings outstanding under existing Pulte Mortgage arrangements at December 31, 2003. Mortgage loans originated by Pulte Mortgage are subsequently sold to outside investors. We anticipate that there will be adequate mortgage financing available for purchasers of our homes.

In February 2003, we sold $300 million of 6.25% unsecured senior notes, due 2013. Proceeds from this issuance were used to retire our $175 million 9.5% senior notes that matured on April 1, 2003 and redeem the remaining outstanding principal balance of approximately $155 million of Del Webb’s $200 million 9.375% senior subordinated notes due 2009 that were called for redemption in March at a price equal to 104.688% of the principal amount.

In May 2003, we sold $400 million of 6.375% unsecured senior notes, due 2033. Proceeds from this issuance were used for general corporate purposes and to retire our $100 million 7% senior notes that matured on December 15, 2003.

In December 2003, we increased our dividend 150% to $.05 per share from $.02 per share.

Pursuant to our $100 million share repurchase program, we repurchased 790,800 common shares at an aggregate cost of approximately $18.2 million during 2003 and 200,000 common shares for approximately $4.3 million in 2002. At December 31, 2003, we had remaining authorization to purchase common stock aggregating $77.5 million.

Our income tax liability and related effective tax rate are affected by a number of factors. In 2003, our effective tax rate was 38.0% compared to 39.0% in 2002 and 38.5% in 2001. The reduction in the effective tax rate for 2003 is principally due to a lower expected effective state income tax rate for 2003 and the shareholders’ approval of our new Senior Management Annual Incentive Plan, which will allow for full tax deductibility of Plan payments under Section 162(m) of the Internal Revenue Service Code. We anticipate that our effective tax rate for 2004 will be approximately 38%.

At December 31, 2003, we had cash and equivalents of $404.1 million, $2.1 billion of unsecured senior notes and $77.3 million of unsecured senior subordinated notes. Other financing includes limited recourse collateralized financing totaling $83.3 million.

Sources of our working capital at December 31, 2003, include cash and equivalents, our $850 million committed unsecured revolving credit facility and Pulte Mortgage’s $860 million revolving credit facilities. Our debt-to-total capitalization, excluding our collateralized debt, was 38.4% as of December 31, 2003, and 33.6% net of cash and equivalents. We expect to maintain our net debt-to-total capitalization at or below the 40% level.

In January 2004, we sold $500 million of 5.25% senior notes, due 2014. Proceeds from the sale will be used to retire the Del Webb 10.25% subordinated debentures called for redemption and for general corporate purposes including continued investment in our business.

We, and the homebuilding industry in general, may be adversely affected during periods of high inflation because of higher land and construction costs. Inflation also increases our financing, labor and material costs. In addition, higher mortgage interest rates significantly affect the affordability of permanent mortgage financing to prospective homebuyers. We attempt to pass to our customers any increases in our costs through increased sales prices. To date, inflation has not had a material adverse effect on our results of operations. However, there is no assurance that inflation will not have a material adverse impact on our future results of operations.

The following table summarizes our payments under contractual obligations as of December 31, 2003:

(a)		Represents our senior notes and subordinated notes and related interest payments

(b)		Represents our limited recourse collateralized financing arrangements and related interest payments

The following table summarizes our other commercial commitments as of December 31, 2003:

(a)		Includes capacity to issue up to $500 million in standby letters of credit of which $157.4 million was outstanding at December 31, 2003.

(b)		Excludes standby letters of credit issued under the Guarantor revolving credit facilities.

We use standby letters of credit and performance bonds to guarantee our performance under various contracts, principally in connection with the development of our projects. The expiration dates of the letter of credit contracts coincide with the expected completion date of the related projects. If the obligations related to a project are ongoing, annual extensions of the letters of credit are typically granted on a year-to-year basis. At December 31, 2003, we had outstanding letters of credit of $215.2 million. Performance bonds do not have stated expiration dates; rather, we are released from the bonds as the contractual performance is completed. These bonds, which approximated $1.2 billion at December 31, 2003, are typically outstanding over a period that approximates 3-5 years. We do not believe that we will be required to draw upon any such letters of credit or performance bonds.

In the ordinary course of business, we enter into land option or option type agreements in order to procure land for the construction of houses in the future. At December 31, 2003, these agreements totaled approximately $4.7 billion. Pursuant to these land option agreements, we provide a deposit to the seller as consideration for the right to purchase land at different times in the future, usually at predetermined prices. If the entity holding the land under option is a variable interest entity, our deposit represents a variable interest in that entity. At December 31, 2003, we consolidated certain variable interest entities with assets totaling $73.3 million.

We currently do not have any non-consolidated special purpose entity arrangements.

The accompanying consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States. When more than one accounting principle, or the method of its application, is generally accepted, we select the principle or method that is appropriate in our specific circumstances (see Note 1 of Notes to Consolidated Financial Statements). Application of these accounting principles requires us to make estimates about the future resolution of existing uncertainties; as a result, actual results could differ from these estimates. In preparing these financial statements, we have made our best estimates and judgments of the amounts and disclosures included in the financial statements, giving due regard to materiality. The development and selection of the following critical accounting policies and estimates have been discussed with the Audit Committee of the Board of Directors.

Homebuilding – Homebuilding revenues are recorded when the sales of homes are completed and ownership has transferred to the customer. Unfunded settlements are deposits in transit on homes for which the sale was completed. We do not engage in arrangements whereby we have ongoing relationships with our homebuyers that require us to repurchase our homes or provide homebuyers with the right of return.

Financial Services – Mortgage servicing fees represent fees earned for servicing loans for various investors. Servicing fees are based on a contractual percentage of the outstanding principal balance and are credited to income when the related mortgage payments are received. Loan origination fees, commitment fees and certain direct loan origination costs are deferred as an adjustment to the cost of the related mortgage loan until such loan is sold. Gains and losses from sales of mortgage loans are recognized when the loans are sold. Interest income is accrued from the date a mortgage loan is originated until the loan is sold.

Our finished inventories are stated at the lower of accumulated costs or net realizable value. Included in inventories are all direct development costs. Inventories under development or held for development are stated at accumulated cost, unless they are determined to be impaired, in which case these inventories are measured at fair value. If actual market conditions are less favorable than those projected by management, additional inventory adjustments may be required.

We capitalize interest cost into homebuilding inventories. Interest capitalized each quarter is identified as a separate layer in our capitalized interest balance sheet pool. Each layer of capitalized interest is amortized over a period that approximates the average life of communities under development. Interest expense is allocated to the quarters over the amortization period based on the historical relationship of unit settlements in a quarter compared to annual unit settlements. This period increased in 2001, due to the addition of the Del Webb properties, which have a longer life cycle, and could change in the future as the mix of communities change.

Sold units are expensed on a specific identification basis. Under the specific identification basis, cost of sales includes the construction cost of the home, an average lot cost by project based on land acquisition and development costs, and closing costs and commissions. Construction cost of the home includes amounts paid through the closing date of the home, plus an accrual for costs incurred but not yet paid, based on an analysis of budgeted construction cost. This accrual is reviewed for accuracy based on actual payments made after closing compared to the amount accrued, and adjustments are made if needed. Total project land acquisition and development costs are based on an analysis of budgeted costs compared to actual costs incurred to date and estimates to complete. Adjustments to estimated total project land acquisition and development costs for the project affect the amount of future lots costed.

Residential mortgage loans available-for-sale are stated at the lower of aggregate cost or market value. Gains and losses from sales of mortgage loans are recognized when the loans are sold. We hedge our residential mortgage loans available-for-sale. Gains and losses from closed commitments and futures contracts are matched against the related gains and losses on the sale of mortgage loans.

We have identified significant intangible assets and generated significant goodwill, most recently as a result of the Del Webb merger in 2001. Intangible assets, primarily trademarks and tradenames, were valued using proven valuation procedures and are amortized over their estimated useful life. Goodwill is subject to annual impairment testing. The carrying value and ultimate realization of these assets is dependent upon estimates of future earnings and benefits that we expect to generate from their use. If our expectations of future results and cash flows decrease significantly, intangible assets and goodwill may be impaired and the resulting charge to operations may be material. If we determine that the carrying value of intangible assets, long-lived assets and goodwill may not be recoverable based upon the existence of one or more indicators of impairment, we measure impairment based on one of three methods. For assets related to ongoing operations, we use a projected undiscounted cash flow method to determine if impairment exists and then measure impairment using discounted cash flows. For assets to be disposed of, we assess the fair value of the asset based on current market conditions for similar assets. For goodwill, we assess fair value by measuring discounted cash flows of our reporting units and measure impairment as the difference between the resulting implied fair value of goodwill and the recorded book value.

The estimates of useful lives and expected cash flows require us to make significant judgments regarding future periods that are subject to some factors outside of our control. Changes in these estimates could result in significant revisions to the carrying value of these assets and material charges to the results of operations.

Home purchasers are provided with warranties against certain building defects. The specific terms and conditions of those warranties vary geographically. Most warranties cover different aspects of the home’s construction and operating systems for a period of up to ten years. We estimate the costs to be incurred under these warranties and record a liability in the amount of such costs at the time product revenue is recognized. Factors that affect our warranty liability include the number of homes sold, historical and anticipated rates of warranty claims, and cost per claim. We periodically assess the adequacy of recorded warranty liabilities and adjust the amounts as necessary. Although we have not made significant adjustments to the accrual in the past, actual warranty cost in the future could differ from our current estimate.

We currently have several stock-based employee compensation plans. Effective January 1, 2003 we adopted the preferable fair value recognition provisions of SFAS No. 123, “Accounting for Stock Issued to Employees.” We selected the prospective method of adoption as permitted by SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure.” Under the prospective method, we will recognize compensation expense based on the fair value provisions of SFAS No. 123 for all new stock option grants effective January 1, 2003. Grants made prior to January 1, 2003 will continue to be accounted for under the recognition and measurement principles of APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and related Interpretations. With the exception of certain variable stock option grants, no stock-based employee compensation cost is reflected in net income for grants made prior to January 1, 2003, as all options granted under those plans had an exercise price equal to the market value of the underlying common stock on the date of the grant.

We use the Black-Scholes option-pricing model to determine the fair value of each option grant. The Black-Scholes model includes assumptions regarding dividend yields, expected volatility, risk-free interest rates and expected lives. These assumptions reflect management’s best estimates, but these items involve inherent uncertainties based on market conditions generally outside of our control. As a result, if other assumptions had been used, stock-based compensation expense could have been materially impacted. Furthermore, if management uses different assumptions in future periods, stock-based compensation expense could be materially impacted in future periods.

We are subject to interest rate risk on our rate-sensitive financing to the extent long-term rates decline. The following tables set forth, as of December 31, 2003 and 2002, our rate-sensitive financing obligations, principal cash flows by scheduled maturity, weighted-average interest rates and estimated fair market value ($000’s omitted).

Pulte Mortgage, operating as a mortgage banker, is also subject to interest rate risk. Interest rate risk begins when we commit to lend money to a customer at agreed-upon terms (i.e., commit to lend at a certain interest rate for a certain period of time). The interest rate risk continues through the loan closing and until the loan is sold to an investor. During 2003 and 2002, this period of interest rate exposure averaged approximately 60 days. In periods of rising interest rates, the length of exposure will generally increase due to customers locking in an interest rate sooner as opposed to letting the interest rate float.

We minimize interest rate risk by (i) financing the loans via a variable rate borrowing agreement tied to the Federal Funds rate and (ii) hedging our loan commitments and closed loans through derivative financial instruments. These financial instruments include cash forward placement contracts on mortgage-backed securities, whole loan investor commitments, options on treasury future contracts and options on cash forward placement contracts on mortgage-backed securities. We do not use any derivative financial instruments for trading purposes.

Hypothetical changes in the fair values of our financial instruments arising from immediate parallel shifts in long-term mortgage rates of plus 50, 100 and 150 basis points would not be material to our financial results.

Our aggregate net investments exposed to foreign currency exchange rate risk include our operations in Mexico which approximated $65.8 million, our mortgage banking joint venture investment in Mexico which approximated $17.5 million and our operations in Argentina which approximated $13.2 million.

As a cautionary note, except for the historical information contained herein, certain matters discussed in Item 7., Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 7A., Quantitative and Qualitative Disclosures About Market Risk, are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from our future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among other things, (1) general economic and business conditions; (2) interest rate changes and the availability of mortgage financing; (3) the relative stability of debt and equity markets; (4) competition; (5) the availability and cost of land and other raw materials used in our homebuilding operations; (6) the availability and cost of insurance covering risks associated with our business; (7) shortages and the cost of labor; (8) weather related slowdowns; (9) slow growth initiatives and/or local building moratoria; (10) governmental regulation, including the interpretation of tax, labor and environmental laws; (11) changes in consumer confidence and preferences; (12) required accounting changes; (13) terrorist acts and other acts of war; and (14) other factors over which we have little or no control.

PULTE HOMES, INC.
CONSOLIDATED BALANCE SHEETS
December 31, 2003 and 2002
($000’s omitted, except share data)

PULTE HOMES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended December 31, 2003, 2002 and 2001
(000’s omitted, except per share data)

PULTE HOMES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
For the years ended December 31, 2003, 2002 and 2001
($000’s omitted, except per share data)

PULTE HOMES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2003, 2002 and 2001
($000’s omitted)


Title of each class		Name of each exchange on which registered

Common Stock, par value $.01		New York Stock Exchange


PART I
	ITEM 1. BUSINESS
	ITEM 2. PROPERTIES
	ITEM 3. LEGAL PROCEEDINGS
	ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
	ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT
PART II
	ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
	ITEM 6. SELECTED FINANCIAL DATA
	ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
	ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
	ITEM 9A. CONTROLS AND PROCEDURES
PART III
	ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
	ITEM 11. EXECUTIVE COMPENSATION
	ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
	ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
	ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
PART IV
	ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
SIGNATURES
EXHIBIT INDEX
Indenture Supplement dated April 3, 2000
Indenture Supplement dated February 21, 2001
Indenture Supplement dated June 12, 2002
Indenture Supplement dated February 3, 2003
Indenture Supplement dated May 22, 2003
Indenture Supplement dated January 16, 2004
Intercreditor and Subordination Agreement
Fourth Amendment to Credit Agreement
Subsidiaries of the Registrant
Consent of Independent Auditors
Chief Executive Officer Certification Section 302
Chief Financial Officer Certification Section 302
Chief Executive Officer Certification Section 906
Chief Financial Officer Certification Section 906


			Years Ended December 31,
			($000’s omitted)

			2003		2002		2001		2000		1999

Homebuilding settlement revenues:
	Domestic		$	8,482,341	$	6,991,614	$	5,145,526	$	4,083,816	$	3,655,775
	International			228,137		196,074		35,169		27,159		21,941

		Total	$	8,710,478	$	7,187,688	$	5,180,695	$	4,110,975	$	3,677,716

Homebuilding settlement units:
	Domestic			32,693		28,903		22,915		19,799		19,569
	International			7,120		6,525		221		264		262

		Total		39,813		35,428		23,136		20,063		19,831


	2003						2002

					Declared						Declared
	High		Low		Dividends		High		Low		Dividends

1st Quarter	$	26.59	$	22.73	$	.02	$	27.22	$	20.99	$	.02
2nd Quarter		35.99		24.66		.02		29.47		23.00		.02
3rd Quarter		34.88		28.98		.02		28.97		20.41		.02
4th Quarter		49.42		33.73		.05		24.85		18.30		.02


	Years Ended December 31,
	($000’s omitted)

	2003			2002			2001(a)			2000			1999

OPERATING DATA:
Homebuilding:
Revenues	$	8,929,798		$	7,363,989		$	5,309,829		$	4,195,675		$	3,711,196

Income before income taxes	$	1,002,161		$	724,067		$	512,291		$	386,604		$	311,668

Financial Services:
Revenues	$	115,847		$	106,628		$	77,222		$	50,669		$	54,279

Income before income taxes	$	68,846		$	66,723		$	36,948		$	24,788		$	25,721

Corporate:
Revenues	$	3,281		$	1,202		$	2,210		$	633		$	2,748

Loss before income taxes	$	(75,351	)	$	(61,968	)	$	(57,452	)	$	(56,296	)	$	(50,984	)

Consolidated results:
Revenues	$	9,048,926		$	7,471,819		$	5,389,261		$	4,246,977		$	3,768,223

Income from continuing operations before income taxes	$	995,656		$	728,822		$	491,787		$	355,096		$	286,405
Income taxes		378,334			284,221			189,362			136,712			108,118

Income from continuing operations		617,322			444,601			302,425			218,384			178,287
Income (loss) from discontinued operations		7,312			9,044			(1,032	)		(29,871	)		(122	)

Net income	$	624,634		$	453,645		$	301,393		$	188,513		$	178,165

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MICHIGAN (State or other jurisdiction of incorporation or organization)		38-2766606 (I.R.S. Employer Identification No.)


Item			Page
No.			No.

		Part I
	1	Business		3
	2	Properties		9
	3	Legal Proceedings		9
	4	Submission of Matters to a Vote of Security Holders		10
	4A	Executive Officers of the Registrant		10
		Part II
	5	Market for the Registrant’s Common Equity and Related Stockholder Matters		11
	6	Selected Financial Data		11
	7	Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
	7A	Quantitative and Qualitative Disclosures About Market Risk		24
	8	Financial Statements and Supplementary Data		26
	9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		65
	9 A	Controls and Procedures		65
		Part III
	10	Directors and Executive Officers of the Registrant		65
	11	Executive Compensation		65
	12	Security Ownership of Certain Beneficial Owners and Management		65
	13	Certain Relationships and Related Transactions		66
	14	Principal Accountant Fees and Services		66
		Part IV
	15	Exhibits, Financial Statement Schedules and Reports on Form 8-K		66
		Signatures		71


				Year Became
Name	Age		Position	An Officer

William J. Pulte		71	Chairman of the Board		1956
Richard J. Dugas, Jr.		38	President and Chief Executive Officer		2002
Steven C. Petruska		45	Executive Vice President and Chief Operating Officer		2004
Roger A. Cregg		47	Executive Vice President and Chief Financial Officer		1997
Leo J. Taylor		45	Executive Vice President, Human Resources		2003
John R. Stoller		55	Senior Vice President, General Counsel and Secretary		1990
Vincent J. Frees		53	Vice President and Controller		1995
Gregory M. Nelson		48	Vice President and Assistant Secretary		1993
Bruce E. Robinson		42	Vice President and Treasurer		1998


	December 31,
	($000’s omitted)

	2003		2002		2001		2000		1999

BALANCE SHEET DATA:
House and land inventories	$	5,528,410	$	4,293,597	$	3,833,763	$	1,896,856	$	1,822,060
Total assets		8,063,352		6,872,087		5,710,893		2,886,483		2,487,351
Senior notes and subordinated notes		2,150,972		1,913,268		1,722,864		666,296		508,690
Shareholders’ equity		3,448,123		2,760,426		2,276,665		1,247,931		1,093,319


Northeast:		Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Pennsylvania, Virginia

Southeast:		Florida, Georgia, North Carolina, South Carolina, Tennessee

Midwest:		Illinois, Indiana, Kansas, Michigan, Minnesota, Ohio

Central:		Colorado, Texas, New Mexico

West:		Arizona, California, Nevada


		Payments Due by Period
		($000’s omitted)

		Total		2004		2005-2006		2007-2008		After 2008

Contractual obligations:
	Long-term debt (a)	$	4,394,051	$	346,369	$	403,778	$	269,652	$	3,374,252
	Capital lease obligations		—		—		—		—		—
	Operating lease obligations		126,403		32,590		44,057		26,355		23,401
	Purchase obligations		—		—		—		—		—
	Other long-term liabilities (b)		91,223		32,849		50,806		5,314		2,254

Total contractual obligations		$	4,611,677	$	411,808	$	498,641	$	301,321	$	3,399,907


		Amount of Commitment Expiration by Period
		($000’s omitted)

		Total		2004		2005-2006		2007-2008		After 2008

Other commercial commitments:
	Guarantor revolving credit facilities (a)	$	850,000	$	—	$	—	$	850,000	$	—
	Non-guarantor revolving credit facilities		860,000		—		860,000		—		—
	Other credit facilities		3,000		3,000		—		—		—
	Standby letters of credit (b)		57,844		56,890		954		—		—

Total commercial commitments		$	1,770,844	$	59,890	$	860,954	$	850,000	$	—


			As of December 31, 2003 for the
			Years ended December 31,

																		There-						Fair
			2004			2005			2006			2007			2008			after			Total			Value

Rate sensitive liabilities:
	Fixed interest rate debt:
		Senior notes and subordinated notes	$	185,503		$	125,000		$	—		$	—		$	—		$	1,848,563		$	2,159,066		$	2,387,945
		Average interest rate		9.12	%		7.0	%		—			—			—			7.29	%		7.45	%		—
		Limited recourse collateralized financing	$	29,259		$	33,865		$	13,267		$	2,367		$	2,354		$	2,143		$	83,255		$	83,255
		Average interest rate		2.52	%		6.00	%		3.50	%		5.09	%		5.24	%		4.78	%		4.31	%		—


			As of December 31, 2002 for the
			Years ended December 31,

																		There-						Fair
			2003			2004			2005			2006			2007			after			Total			Value

Rate sensitive liabilities:
	Fixed interest rate debt:
		Senior notes and subordinated notes	$	275,000		$	112,000		$	125,000		$	—		$	—		$	1,395,976		$	1,907,976		$	2,006,173
		Average interest rate		8.59	%		8.38	%		7.3	%		—			—			8.46	%		8.23	%		—
		Limited recourse collateralized financing	$	59,563		$	41,528		$	31,131		$	9,128		$	1,350		$	2,826		$	145,526		$	145,526
		Average interest rate		5.27	%		5.53	%		6.12	%		2.16	%		4.00	%		4.00	%		5.30	%		—


					2003			2002

			ASSETS
Cash and equivalents					$	404,092		$	613,168
Unfunded settlements						122,300			60,641
House and land inventory						5,528,410			4,293,597
Land, not owned, under option agreements						73,256			—
Residential mortgage loans available-for-sale						541,126			600,339
Goodwill						307,693			307,693
Intangible assets, net						143,704			151,954
Other assets						942,771			832,952
Deferred income tax asset						—			11,743

					$	8,063,352		$	6,872,087

				LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
	Accounts payable, including book overdrafts of $222,681 and $181,812 in 2003 and 2002, respectively				$	452,648		$	376,653
	Customer deposits					372,507			265,817
	Accrued and other liabilities					1,072,550			906,293
	Collateralized short-term debt, recourse solely to applicable non-guarantor subsidiary assets					479,287			559,621
	Income taxes					79,391			90,009
	Deferred income tax liability					7,874			—
	Senior notes and subordinated notes					2,150,972			1,913,268

		Total liabilities				4,615,229			4,111,661

Shareholders’ Equity:
	Preferred stock, $.01 par value; 50,000,000 shares authorized, none issued					—			—
	Common stock, $.01 par value; 400,000,000 shares authorized, 125,152,816 and 122,249,872 shares issued and outstanding in 2003 and 2002, respectively					1,252			1,222
	Additional paid-in capital					1,015,991			932,551
	Unearned compensation					(656	)		(9,866	)
	Accumulated other comprehensive loss					(39,142	)		(35,371	)
	Retained earnings					2,470,678			1,871,890

		Total shareholders’ equity				3,448,123			2,760,426

					$	8,063,352		$	6,872,087


		Years Ended December 31,

		2003		2002		2001(a)			2000			1999

PER SHARE DATA *(b)*:
Earnings per share - basic:
	Income from continuing operations	$	5.05	$	3.68	$	3.08		$	2.64		$	2.06
	Income (loss) from discontinued operations		.06		.07		(.01	)		(.36	)		—

	Net income	$	5.11	$	3.75	$	3.07		$	2.28		$	2.06

	Weighted-average common shares outstanding (000’s omitted)		122,162		120,906		98,196			82,620			86,492

Earnings per share - assuming dilution:
	Income from continuing operations	$	4.91	$	3.60	$	3.00		$	2.59		$	2.03
	Income (loss) from discontinued operations		.06		.07		(.01	)		(.35	)		—

	Net income	$	4.97	$	3.67	$	2.99		$	2.24		$	2.03

	Weighted-average common shares outstanding and effect of dilutive securities (000’s omitted)		125,730		123,492		100,646			84,292			87,646

Shareholders’ equity		$	27.55	$	22.58	$	19.22		$	15.01		$	12.64

Cash dividends declared		$	.11	$	.08	$	.08		$	.08		$	.08


		Years Ended December 31,

		2003		2002		2001

Unit settlements:
	Northeast		2,692		2,440		2,014
	Southeast		8,234		8,271		8,126
	Midwest		4,936		4,458		3,288
	Central		5,283		4,588		3,982
	West		11,548		9,146		5,505

			32,693		28,903		22,915

Net new orders - units (a):
	Northeast		3,098		2,738		1,905
	Southeast		9,021		8,651		8,111
	Midwest		4,736		4,684		3,515
	Central		5,125		4,590		3,817
	West		13,009		10,167		4,815

			34,989		30,830		22,163

Net new orders - dollars ($000’s omitted) (a)		$	9,555,000	$	7,731,000	$	4,855,000

Backlog at December 31 - units:
	Northeast		1,535		1,129		831
	Southeast		3,726		2,939		2,559
	Midwest		1,401		1,601		1,375
	Central		1,156		905		903
	West		6,134		4,031		3,010

			13,952		10,605		8,678

Backlog at December 31 - dollars ($000’s omitted)		$	4,147,000	$	2,857,000	$	2,118,000


		Years Ended December 31,

		2003		2002		2001

Total originations:
	Loans		28,655		23,074		19,018

	Principal ($000’s omitted)	$	4,989,500	$	3,771,000	$	2,937,100

Originations for Pulte customers:
	Loans		23,864		19,537		15,402

	Principal ($000’s omitted)	$	4,179,100	$	3,176,500	$	2,385,500


											Accumulated
					Additional						Other
		Common			Paid-in			Unearned			Comprehensive			Retained
		Stock			Capital			Compensation			Income (Loss)			Earnings			Total

Shareholders’ Equity, December 31, 2000			832			109,177			—			185			1,137,737			1,247,931
Common stock issued and stock options exchanged in merger			336			729,051			—			—			—			729,387
Stock option exercise, including tax benefit of $4,982			14			18,505			—			—			—			18,519
Restricted stock award			2			5,556			(5,558	)		—			—			—
Restricted stock award amortization			—			—			1,699			—			—			1,699
Cash dividends declared - $.08 per share			—			—			—			—			(8,110	)		(8,110	)
Comprehensive income:
	Net income		—			—			—			—			301,393			301,393
	Change in fair value of derivatives, net of income taxes of $371		—			—			—			(592	)		—			(592	)
	Foreign currency translation adjustments		—			—			—			(13,562	)		—			(13,562	)

	Total comprehensive income																	287,239

Shareholders’ Equity, December 31, 2001			1,184			862,289			(3,859	)		(13,969	)		1,431,020			2,276,665
Stock option exercise, including tax benefit of $20,651			34			55,667			—			—			—			55,701
Restricted stock award			6			11,313			(11,319	)		—			—			—
Restricted stock award amortization			—			—			5,312			—			—			5,312
Cash dividends declared - $.08 per share			—			—			—			—			(9,773	)		(9,773	)
Stock repurchases			(2	)		(1,793	)		—			—			(3,002	)		(4,797	)
Stock based compensation			—			5,075			—			—			—			5,075
Comprehensive income:
	Net income		—			—			—			—			453,645			453,645
	Change in fair value of derivatives, net of income taxes of $807		—			—			—			(1,288	)		—			(1,288	)
	Foreign currency translation adjustments		—			—			—			(20,114	)		—			(20,114	)

	Total comprehensive income																	432,243

Shareholders’ Equity, December 31, 2002			1,222			932,551			(9,866	)		(35,371	)		1,871,890			2,760,426
Stock option exercise, including tax benefit of $28,742			32			68,203			—			—			—			68,235
Restricted stock award			6			(6	)		—			—			—			—
Restricted stock award amortization			—			—			9,210			—			—			9,210
Cash dividends declared - $.11 per share			—			—			—			—			(13,612	)		(13,612	)
Stock repurchases			(8	)		(6,062	)		—			—			(12,234	)		(18,304	)
Stock based compensation			—			21,305			—			—			—			21,305
Comprehensive income:
	Net income		—			—			—			—			624,634			624,634
	Change in fair value of derivatives, net of income taxes of ($1,055)		—			—			—			1,682			—			1,682
	Foreign currency translation adjustments		—			—			—			(5,453	)		—			(5,453	)

	Total comprehensive income																	620,863

Shareholders’ Equity, December 31, 2003		$	1,252		$	1,015,991		$	(656	)	$	(39,142	)	$	2,470,678		$	3,448,123