UNITED STATES
                       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 JULY 1, 1997 TO JUNE 30, 1998.

[ ]  Transition  Report  Pursuant  to Section  13 or 15(d) of the  Securities
     Exchange Act of 1934. For the transition period from N/A to N/A .

Commission File Number:  1-4785

                              DEL WEBB CORPORATION
             (Exact name of registrant as specified in its charter)


       Delaware                                          86-0077724
(State of Incorporation)                    (IRS Employer Identification Number)


6001 North 24th Street, Phoenix, Arizona                    85016
(Address of principal executive offices)                  (Zip Code)

                                 (602) 808-8000
                (Registrant's phone number, including area code)

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

       Title of each class             Name of each exchange on which registered
       -------------------             -----------------------------------------
                                                  New York Stock Exchange
Common Stock (par value $.001 per share)          Pacific Stock Exchange

9 3/4% Senior Subordinated Debentures due 2003    New York Stock Exchange
9    % Senior Subordinated Debentures due 2006    New York Stock Exchange
9 3/4% Senior Subordinated Debentures due 2008    New York Stock Exchange
9 3/8% Senior Subordinated Debentures due 2009    New York Stock Exchange  

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

                                      NONE

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. [X]

Registrant's Common Stock outstanding at July 31, 1998 was 18,107,482 shares. At
that date,  the  aggregate  market value of  Registrant's  Common shares held by
non-affiliates, based upon the closing price of the Common Stock on the New York
Stock Exchange on that date, was approximately $450,400,000.

                       Documents Incorporated by Reference

Portions of  Registrant's  definitive  Proxy Statement for the Annual Meeting of
Shareholders to be held on November 4, 1998 are incorporated herein as set forth
in Part III of this Annual Report.
<PAGE>
                              DEL WEBB CORPORATION
                             FORM 10-K ANNUAL REPORT
                            For the Fiscal Year Ended
                                  June 30, 1998

                                TABLE OF CONTENTS

                                     PART I

Items 1.                                                                    PAGE
and 2.
         Business and Properties

         The Company......................................................... 1
         Communities......................................................... 1
         Product Design...................................................... 4
         Construction........................................................ 4
         Sales Activities.................................................... 4
         Competition......................................................... 4
         Certain Factors Affecting the Company's Operations.................. 5
         Forward Looking Information; Certain Cautionary Statements...........7
         Executive Officers of the Company................................... 8
         Employees............................................................9

Item 3.  Legal Proceedings....................................................9

Item 4.  Submission of Matters to a Vote of Security Holders..................9


                                     PART II

Item 5.  Market for the Registrant's Common Equity and
           Related Stockholder Matters.......................................10

Item 6.  Selected Consolidated Financial Data................................11

Items 7.
and 7a.  Management's Discussion and Analysis of Financial Condition
           and Results of Operations
             Certain Consolidated Financial and Operating Data...............13
             Results of Operations...........................................16
             Liquidity and Financial Condition of the Company................19
             Market Risk for Financial Instruments...........................20
             Year 2000 Issue.................................................20
             Impact of Inflation.............................................21
             Accounting Standards Not Yet Adopted by the Company.............22

Item  8. Financial Statements and Supplementary Data.........................22

Item  9. Changes in and Disagreements with Accountants
           on Accounting and Financial Disclosure............................22

<PAGE>
                          TABLE OF CONTENTS (continued)

                                                                            PAGE
                                    PART III

Item 10. Directors and Executive Officers of the Registrant..................23

Item 11. Executive Compensation..............................................23

Item 12. Security Ownership of Certain Beneficial Owners
           and Management....................................................23

Item 13. Certain Relationships and Related Transactions......................23


                                     PART IV

Item 14. Exhibits, Financial Statement Schedules and
           Reports on Form 8-K...............................................24
<PAGE>
                                     PART I

Items 1. and 2. Business and Properties

THE COMPANY

Del   Webb   Corporation   develops   residential   communities   ranging   from
smaller-scale,  non-amenitized  communities within its conventional homebuilding
operations to large-scale,  master-planned communities with extensive amenities.
The Company currently conducts its operations in Arizona,  California,  Florida,
Illinois, Nevada, South Carolina and Texas.

The  Company's  primary  activities  involve  the  development  of  large-scale,
master-planned communities with extensive amenities for active adults age 55 and
over.  The Company is one of the nation's  leading  developers of  age-qualified
active  adult  communities.  It has  extensive  experience  in the active  adult
community business, having built and sold more than 60,000 homes at ten Sun City
communities over the past 38 years.  The Company  designs,  develops and markets
these communities, controlling all phases of the master plan development process
from land  selection  through  the  construction  and sale of homes.  Within its
communities, the Company is usually the exclusive developer of homes.

The Company was  incorporated in 1946 in Arizona and  reincorporated  in 1994 in
Delaware.  The Company's  principal  executive offices are located at 6001 North
24th Street, Phoenix,  Arizona 85016 and its telephone number is (602) 808-8000.
The Company conducts  substantially all of its activities  through  subsidiaries
and, as used in this Annual  Report,  the term the  "Company"  includes Del Webb
Corporation and its subsidiaries unless the context indicates otherwise.

Statements in this Annual Report as to acreage,  mileage,  number of home sites,
square feet, employees and shareholders are approximations.

COMMUNITIES

The following table shows, at June 30, 1998, certain information  concerning the
operating and  pre-operating  communities  at which the Company has planned home
sites, substantially all of which are controlled by the Company.
<TABLE>
<CAPTION>
                                                                             Remaining Home Sites(1)
                                                         Total     Home      -------------------------
                                        First           Planned  Closings                      Under
                                         Home    Total    Home    Through                      Option
                                       Closing   Acres   Sites    6/30/98   Planned   Owned   or Other
                                       ---------------------------------------------------------------
<S>                                      <C>     <C>      <C>      <C>       <C>      <C>      <C>  
Operating Communities:                 
                                       
   Sun Cities Phoenix                    1978   10,859   26,139   17,559     8,580    8,580       --
   Sun Cities Las Vegas                  1989    3,064   10,290    8,359     1,931    1,931       --
   Sun City Palm Desert                  1992    1,225    3,375    1,688     1,687    1,687       --
   Sun City Roseville                    1995    1,200    3,110    2,311       799      799       --
   Sun City Hilton Head                  1995    5,600    8,500    1,062     7,438    3,147    4,291
   Sun City Georgetown                   1996    5,636   10,500    1,299     9,201    8,514      687
   Florida communities                   1996    1,600    2,922      466     2,456    2,456       --
   Other communities                     1998      711    1,701      106     1,595    1,420      175
   Coventry Homes(2)                     1991      N/A    9,750    5,944     3,806    3,806       --
                                                        --------------------------------------------
      Total Operating Communities                        76,287   38,794    37,493   32,340    5,153
                                                        --------------------------------------------
Pre-Operating Communities:             
   Sun City Lincoln Hills                N/A     2,300    5,600       --     5,600    1,510    4,090
   Anthem Las Vegas(3)                   N/A     4,700   11,900       --    11,900    5,100    6,800
   Anthem Phoenix                        N/A     5,600   14,500       --    14,500   14,500       --
   Sun City at Huntley                   N/A     1,800    5,000       --     5,000    5,000       --
                                                        --------------------------------------------
      Total Future Communities                           37,000       --    37,000   26,110   10,890
                                                        --------------------------------------------
          Total                                         113,287   38,794    74,493   58,450   16,043
                                                        ============================================
</TABLE>
                                        1
<PAGE>                            
(1)  Material additional  regulatory  approvals are required to build on many of
     these home sites.

(2)  The Company's conventional subdivision homebuilding operations.

(3)  The  Company  owns  2,500 of the 4,700  acres for  Anthem  Las Vegas and is
     working  toward  completion  of a  land  exchange  with  the  owner  of the
     remaining acres, the Bureau of Land Management,  for the remaining land for
     this community.

                      Operating Master-Planned Communities
                      ------------------------------------

The Sun  Cities  Phoenix  include  Sun  City  West  and Sun  City  Grand.  These
communities are located 25 miles  northwest of downtown  Phoenix,  Arizona.  The
build-out of Sun City West has been coordinated with the development of Sun City
Grand, where home closings began in February 1997.

The Sun Cities  Las Vegas  include  Sun City  Summerlin  and Sun City  MacDonald
Ranch.  Sun City  Summerlin  is located  eight miles  northwest  of downtown Las
Vegas,  Nevada. Sun City MacDonald Ranch is located in Henderson,  Nevada,  near
Las Vegas.

Sun City Palm  Desert is located in the  Coachella  Valley 20 miles east of Palm
Springs,  California, and 130 miles east of downtown Los Angeles. Information in
the above  table is for phase one and part of phase two of that  community.  The
Company  also owns 400  adjacent  acres for the  balance of the second  phase of
development at Sun City Palm Desert.  If developed,  the balance of phase two is
currently planned for 1,300 homes. Development of future phases at the Company's
communities is dependent on, among other  factors,  the state of the economy and
prospects  for the  community  in question  at the time the current  phases near
completion.

Sun City  Roseville  is  located  20 miles  northeast  of  downtown  Sacramento,
California.

Sun City Hilton Head is located  inland 13 miles from Hilton Head Island,  South
Carolina.

Sun City Georgetown is located 30 miles north of downtown Austin, Texas.

The  Florida  communities  consist  of  two  communities  --  the  Spruce  Creek
communities -- located near Ocala,  Florida. In January 1998 the Company entered
the  active  adult  community   business  in  Florida  by  acquiring  these  two
communities.

The other communities  represent three smaller-scale  communities in Arizona and
California  at which net new order  activity and home  closings  began in fiscal
1998. Two of these communities are age-qualified and one is not.

               Future and Pre-Operating Master-Planned Communities
               ---------------------------------------------------

The Company believes that the demographic  attributes of its active adult market
segment of people age 55 and over present  significant  opportunities for future
active  adult  communities.  The  Company's  plan  is  to  capitalize  on  those
opportunities and its experience,  expertise and reputation by developing active
adult  communities in  strategically  selected  locations.  The current business
strategy  of the  Company  includes  conducting  extensive  market  research  on
prospective areas, including consumer surveys and supply and demand analyses, in
connection with its evaluation of sites for future active adult communities.  To
the extent the Company has had a successful  community  in an area,  the Company
generally strives to maintain a market presence in that area through development
of a successor community as build-out of the former community approaches.

At any  given  time,  the  Company  may have a number of land  acquisitions  for
potential  communities  under study and in various  stages of  investigation  or
negotiation.  The Company is currently investigating the acquisition of land for
communities  to be located  both in areas of the  country  where the Company has
active adult  communities and in other areas,  including full four-season  areas
(i.e.,  areas  which  experience  cold  winters),  where  it does  not yet  have
experience in developing communities.

In making  significant land  acquisitions,  the Company  generally  endeavors to
acquire  options on the land to mitigate  risks and reduce  holding costs during
the  detailed  feasibility  and  entitlement  process.  However,  under  certain
circumstances,  the  Company  may  acquire  land  at an  earlier  stage  in  the
development process.
                                        2
<PAGE>
Set  forth  below  is  selected  information  concerning  several  pre-operating
communities which the Company is currently developing.

     Sun City Lincoln Hills
     ----------------------

Sun City Lincoln  Hills is located  close to and is planned as the  successor to
Sun City Roseville. The Company broke ground at this community in April 1998 and
anticipates  beginning sales  activities in the third quarter of fiscal 1999 and
the first home closings in the first quarter of fiscal 2000.

     Anthem Las Vegas
     ----------------

The Company's  Anthem Las Vegas project will include an active adult  community,
Sun City Anthem, planned as the successor to Sun City Summerlin. Sun City Anthem
is planned  for 9,000  homes to be located on 3,400  acres.  The  Company  broke
ground at this  community in November  1997 and began sales  activities  in July
1998.  The first home closings are  anticipated  in the second quarter of fiscal
1999.

In  addition  to Sun  City  Anthem,  Anthem  Las  Vegas  is also  planned  for a
non-age-qualified golf community,  Anthem Country Club. The company broke ground
at Anthem  Country  Club,  which is planned  for 1,500  homes on 950  acres,  in
November  1997 and began sales  activities  in July 1998.  Anthem Las Vegas will
also have a conventional  homebuilding  component,  Coventry  Anthem,  currently
planned  for 1,400  homes on 300 acres.  The first home  closings at both Anthem
Country Club and Coventry  Anthem are anticipated in the third quarter of fiscal
1999.

The entire Anthem Las Vegas  project is planned for a total of 4,700 acres.  The
2,500 acres owned by the  Company for Anthem Las Vegas were  acquired  through a
land exchange with the Bureau of Land Management ("BLM").  The Company continues
to work toward  completion of an exchange with the BLM for the remaining  acres,
substantially all of which will be used for Sun City Anthem.

     Anthem Phoenix
     --------------

Anthem Phoenix (formerly the Villages at Desert Hills), located near Phoenix, is
planned to include a non-agequalified  country club community and a conventional
homebuilding  component.  The Company began offsite development in November 1997
and anticipates  beginning sales  activities in fiscal 1999 and home closings in
fiscal 2000.

     Sun City at Huntley
     -------------------

Sun City at Huntley is located in Huntley,  Illinois (near Chicago). The Company
broke ground at this community in April 1998.  Sales  activities began in August
1998 and the first home closings are anticipated in the fourth quarter of fiscal
1999.

                      Conventional Subdivision Communities
                      ------------------------------------

The  Company  began  its  conventional   subdivision   homebuilding   operations
(conducted  under the name  "Coventry  Homes") in the  Phoenix  area in 1991 and
expanded these  operations to Tucson in 1994, Las Vegas and southern  California
in 1995 and  north-central  Arizona in 1996.  At June 30, 1998 the Company had a
backlog of home sales orders at 24  communities  -- 12 in the Phoenix area, 4 in
the Tucson area,  7 in the Las Vegas area and 1 in  north-central  Arizona.  The
Company   completed  its  conventional   homebuilding   operations  in  southern
California in fiscal 1998.

In order to capitalize on its market knowledge and organizational structure, the
Company's  conventional  homebuilding  activities  are  primarily  conducted  in
metropolitan  or market areas in which the Company is developing an active adult
community.  For the fiscal  year ended June 30, 1998  conventional  homebuilding
operations  generated 21 percent of the  Company's  homebuilding  revenues.  The
Company currently expects that active adult community  development will continue
to be its primary business activity.

                                        3
<PAGE>
PRODUCT DESIGN

The Company  designs homes to suit its market and  endeavors to respect  popular
home design  characteristics in the particular geographic market involved.  Home
designs are periodically reviewed and refined or changed in response to customer
feedback in each market. Homes at the Company's  communities  generally range in
size  from  1,000  square  feet to 3,000  square  feet.  The  Company  offers an
extensive program of interior/exterior upgrades and options to allow home buyers
the ability to customize their homes.

CONSTRUCTION

The Company generally functions as its own general contractor.  At all stages of
production,  the  Company's  management  personnel  and on-site  superintendents
coordinate the activities of contractors,  consultants and suppliers and subject
their work to quality  and cost  controls.  Consulting  firms  assist in project
planning and  independent  contractors are employed to perform almost all of the
site development and construction work. The Company does not sell vacant lots to
others for residential construction purposes. The time required for construction
of the  Company's  homes  depends  on the  weather,  time of year,  local  labor
situations,  availability  of  materials  and supplies  and other  factors.  The
Company  strives to coordinate the  construction of homes with home sales orders
to control the costs and risks  associated with completed but unsold  inventory.
An inventory of unsold homes is maintained for immediate sale to customers.

SALES ACTIVITIES

At each of its large-scale, master-planned communities the Company establishes a
large and  well-appointed  sales pavilion and an extensive  complex of furnished
model homes. These models include a wide variety of single family homes, each of
which is generally available in several exterior styles.

The  Company's  homes  are sold by its  commissioned  sales  personnel,  who are
available  to  provide   prospective   home  buyers  with  floor  plans,   price
information,  option  selections and tours of models and lots.  The  communities
also have co-brokerage programs with independent real estate brokers.  Homes are
sold through sales  contracts,  some of which allow  customers to purchase homes
for delivery up to one year or more in the future. The sales contracts generally
require an initial  deposit and an additional  deposit prior to  commencement of
construction.  The Company provides to all home buyers  standardized  warranties
subject to specified limitations.

While more than one factor may  contribute  to a given home sale,  the Company's
experience  indicates that a substantial portion of the home sales at its active
adult  communities are attributable to follow-ups on referrals from residents of
its communities and to the Company's  "Vacation  Getaway" program.  This program
enables prospective  purchasers to visit an active adult community and stay (for
a modest  charge) in vacation homes for a few days to one week to experience the
Sun City lifestyle prior to deciding whether to purchase a home.

The Company's  information  indicates  that most home buyers at its active adult
communities  generally  visit the  community in which they purchase on more than
one occasion  before buying.  This may affect the success of the sales effort at
those communities at which a higher proportion of the potential customers do not
live within a several-hour driving distance from the community.

The Company also markets its  communities  through  billboards,  television  and
radio  commercials,  local and national print  advertising,  direct mailings and
telemarketing.

The  Company  offers  mortgage  financing  for the  purchasers  of  homes at its
communities. The Company sells the mortgages it generates to third parties.

COMPETITION

All  of  the  Company's  real  estate  operations  are  subject  to  substantial
competition.  The Company  competes with numerous  national,  regional and local
homebuilders and developers, some of which have greater financial resources than
the Company.
                                        4
<PAGE>
With the exception of the recently acquired Spruce Creek Communities near Ocala,
Florida,  the Company  believes that it maintains a leading  position within the
active adult community market in each of the metropolitan  areas in which it has
an active adult  community  currently  generating  revenues.  For the  Company's
active adult  communities,  there are varying  degrees of direct and  increasing
competition  from  businesses  engaged  exclusively  or primarily in the sale of
homes to  buyers  age 55 and older  and from  non-age-qualified,  master-planned
communities in these areas. The Company competes with new home sales and resales
at  these  other  communities  as well  as  with  resales  of  homes  in its own
communities.  The Company  believes there may be significant  additional  future
competition in active adult community  development,  including  competition from
national homebuilders and conventional community developers.

The Company  believes the major  competitive  factors in home purchases  include
location,  home quality, price, value, design, mortgage financing terms, builder
reputation  and  (for its  lage-scale,  master-planned  communities)  lifestyle,
recreational facilities and other amenities.

CERTAIN FACTORS AFFECTING THE COMPANY'S OPERATIONS

Set forth below is a brief  description  of certain  matters that may affect the
Company.

FINANCING AND LEVERAGE. As a result of the company's May 1998 public offering of
$200 million in principal amount of 9 3/8% Senior  Subordinated  Debentures  due
2009 and anticipated  future  borrowings  under the Company's  senior  unsecured
revolving  credit  facility (the "Credit  Facility"),  the Company expects to be
more highly  leveraged than it has been in recent years. The Company's degree of
leverage  from  time to time will  affect  its  interest  incurred  and  capital
resources, which could limit its ability to capitalize on business opportunities
or withstand  adverse  changes.  If the Company is at any time unable to service
its debt,  refinancing or obtaining additional financing may be required and may
not be available or available on terms acceptable to the Company.

Real estate  development is dependent on the availability and cost of financing.
In  periods  of  significant   growth,  the  Company  will  require  significant
additional capital  resources,  whether from issuances of equity or by incurring
additional  indebtedness.  The  availability  and  cost  of  debt  financing  is
dependent on governmental  policies and other factors outside the control of the
Company.

The  Credit   Facility   restricts,   and  the   indentures  for  the  Company's
publicly-held  debt contain  provisions that may restrict,  the indebtedness the
Company may incur. If the Company cannot at any time obtain  sufficient  capital
resources to fund its development and expansion  expenditures,  its projects may
be  delayed,  resulting  in cost  increases,  adverse  effects on the  Company's
results of operations and possible  material adverse effects on the Company.  No
assurance  can be  given as to the  terms,  availability  or cost of any  future
financing the Company may need.

FUTURE COMMUNITIES AND NEW GEOGRAPHIC MARKETS. The Company's communities will be
built out over time. Therefore,  the medium- and long-term future of the Company
will be  dependent  on the  Company's  ability  to  develop  and  market  future
communities  successfully.  Acquiring  land and  committing  the  financial  and
managerial  resources  to develop a  large-scale  community on that land involve
significant risks. Before these communities generate any revenues,  they require
material  expenditures for, among other things,  acquiring large tracts of land,
obtaining development approvals and constructing project infrastructure (such as
roads and utilities),  large recreation centers,  golf courses,  model homes and
sales facilities. It generally takes several years or more for these communities
to recover these material expenditures.

The Company  incurs  additional  risks to the extent it develops  communities in
climates or geographic  areas in which it does not have experience or develops a
different  size  or  style  of  community,  including  acquiring  the  necessary
construction  materials and labor in sufficient amounts and on acceptable terms,
adapting  the  Company's  construction  methods  to  different  geographies  and
climates and reaching  acceptable sales levels at such communities.  Among other
things, the Company believes that a significant portion of the home sales at its
large-scale active adult communities is attributable to referrals from, or sales
to, residents of those communities. The extent of such referrals or sales at new
communities,  including communities developed in other areas of the country, may
be less than the Company has enjoyed at the large-scale active adult communities
where  it  currently  sells  homes,  and  there  will be  challenges  attracting
potential  customers from areas and to a market in which the Company has not had
significant experience.
                                        5
<PAGE>
The Company is in the early stages of developing an active adult  community near
Chicago,  Illinois, the Company's first four-season active adult community,  and
commenced operations near Ocala, Florida in January 1998 through the acquisition
of a local active adult community developer.

GOVERNMENTAL REGULATION AND ENVIRONMENTAL CONSIDERATIONS. The Company's business
is  subject  to  extensive  federal,  state and local  regulatory  requirements,
including with respect to development  activities and land exchanges,  the broad
discretion that governmental  agencies have in administering  those requirements
and  "no  growth"  or  "slow  growth"  political  sentiments,  which  have  been
increasing in recent years, all of which can prevent,  delay, make uneconomic or
significantly increase the cost of its developments.  Environmental concerns and
related governmental  requirements have affected and will continue to affect all
of the Company's community development operations.

If the land exchange for Anthem Las Vegas is not  completed,  that project would
have to be reduced in scope and reconfigured,  which could affect the timing and
potential  profitability of the project,  and the Company may have to dispose of
property it acquired for the exchange at less than its purchase price.

In connection with the  development of the Company's  communities and other real
estate projects, particularly those located in California, numerous governmental
approvals and permits are required  throughout the development  process,  and no
assurance  can be  given as to the  receipt  (or  timing  of  receipt)  of these
approvals or permits. In addition,  third parties can file lawsuits  challenging
approvals or permits received,  which could cause substantial  uncertainties and
material delays for the project and, if successful, could result in approvals or
permits being voided.

The occurrence of any of the above factors could have a material  adverse effect
on the Company.

GEOGRAPHIC   CONCENTRATION.   The  Company's  primary  business  operations  are
particularly  concentrated (in terms of both invested capital and profitability)
in the Phoenix  and Las Vegas  metropolitan  areas.  Its entire  operations  are
comprised of a limited  number of  communities  in seven  states.  The Company's
geographic  concentration  and limited  number of projects may create  increased
vulnerability to regional economic  downturns or other adverse  project-specific
matters.

A significant  number of purchasers at the Company's active adult communities in
Arizona,  Nevada and southern  California  are from southern  California.  Those
communities  have been and may in the future be  affected by  conditions  in the
southern  California  real estate  market and the  southern  California  economy
generally.

CYCLICAL NATURE OF REAL ESTATE OPERATIONS AND OTHER CONDITIONS GENERALLY. All of
the Company's  communities  are subject to real estate market  conditions  (both
where its  communities  are located and in areas where its  potential  customers
reside),  the  cyclical  nature  of real  estate  operations,  general  national
economic conditions and changing demographic conditions.

The  Company's  communities  are  long-term  projects.  Sales  activity  at  the
Company's  communities varies from period to period, and the ultimate success of
any community cannot  necessarily be judged by results in any particular  period
or periods.  A community  may  generate  significantly  higher  sales  levels at
inception (whether because of local pent-up demand in the area or other reasons)
than it does during later periods over the life of the  community.  Revenues and
earnings of the Company will also be affected by  period-to-period  fluctuations
in the mix of product and home  closings  among the  Company's  communities  and
conventional  homebuilding  operations  and by  sales  of  commercial  land  and
facilities at the Company's communities.

The Company's real estate  operations also depend upon the availability and cost
of mortgage  financing.  An increase  in interest  rates,  which may result from
governmental  policies and other factors outside the control of the Company, may
adversely affect the buying decisions of potential home buyers and their ability
to sell their existing homes.
                                        6
<PAGE>
CONSTRUCTION  LABOR  AND  MATERIALS  COSTS.  The  Company  has from time to time
experienced  shortages  of  materials  or  qualified  tradespeople  or  volatile
increases in the cost of certain materials  (particularly increases in the price
of lumber and framing,  which are  significant  components of home  construction
costs), resulting in longer than normal construction periods and increased costs
not  reflected  in the  prices of homes for which home sale  contracts  had been
entered  into up to one year in advance of  scheduled  closing.  Generally,  the
Company's home sale contracts do not contain, or contain limited, provisions for
price  increases if the Company's costs of  construction  increase.  The Company
relies  heavily on local  contractors,  who may be  inadequately  capitalized or
understaffed.  The  inability  or failure of one or more  local  contractors  to
perform may result in construction delays, increased costs and loss of some home
sale contracts.

NATURAL RISKS.  Some of the Company's  communities  are subject to natural risks
including earthquakes,  floods,  tornados,  hurricanes and significant rainfall.
Some  of  these  conditions  have  had a  significant  impact  on the  Company's
operations in the past. Such natural risks could have a material  adverse impact
on the  development of and results of operations for the community  affected and
the Company in the future.

YEAR 2000 ISSUE.  For a discussion of the possible effects on the Company of the
Year  2000  issue,  see  "Management's  Discussion  and  Analysis  of  Financial
Condition and Results of Operations -- Year 2000 Issue."

FORWARD LOOKING INFORMATION; CERTAIN CAUTIONARY STATEMENTS

Certain  statements  contained  in this Annual  Report  that are not  historical
results are forward looking statements. These forward looking statements involve
risks and  uncertainties  including but not limited to those  referred to above.
Actual results may differ  materially from those projected or implied.  Further,
certain forward looking  statements are based upon assumptions of future events,
which may not prove to be accurate.
                                        7
<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY

Set forth below are the names and ages of all executive  officers of the Company
and the offices held with the Company at July 31, 1998.
<TABLE>
<CAPTION>
                                                                                             Years
                                                                              Years as an   Employed
                                                                               Executive     by the
    Name               Age               Position                               Officer     Company
-----------------------------------------------------------------------------------------------------
<S>                    <C>    <C>                                                 <C>          <C>
P. J. Dion             53     Chairman of the Board and                           16           16
                                 Chief Executive Officer                      
L. C. Hanneman, Jr.    51     President and Chief Operating Officer                9           26
R. C. Jones            53     Senior Vice President and                            6            6
                                 General Counsel                              
A. L. Mariucci         41     Senior Vice President                               12           14
J. A. Spencer          49     Senior Vice President and                           13           19
                                 Chief Financial Officer                      
D. V. Mickus           52     Vice President, Treasurer and Secretary             12           15
D. E. Rau              41     Vice President and Controller                       12           13
</TABLE>                                                                      
                                                                          
Mr. Dion has served as Chairman of the Board and Chief  Executive  Officer since
November 1987.

Mr. Hanneman has served as President and Chief Operating Officer since May 1998.
Prior to that time he served as  Executive  Vice  President,  overseeing  active
adult  community  operations,  from May 1996 to May 1998.  Prior to that time he
served  as  Senior  Vice  President  from  January  1994 to May 1996 and as Vice
President  from  January 1989 to January  1994.  From August 1987 to May 1996 he
served as General Manager of Sun Cities Las Vegas.

Mr. Jones as served as Senior Vice President and General Counsel since May 1998.
Prior to that time he served as Vice President and General  Counsel from January
1992 to May 1998.

Ms. Mariucci has served as Senior Vice President  since May 1996.  Prior to that
time she served as a Vice  President  from June 1986 (when she began  serving as
Vice  President,  Corporate  Planning and  Development) to May 1996. She has had
responsibility  for overseeing the Company's  non-age  qualified  communites and
operations  since January 1998. Prior to that time she served as General Manager
of Terravita  from December  1992 to January 1998 and General  Manager of Anthem
Phoenix from July 1996 to January 1998.

Mr.  Spencer has served as Chief  Financial  Officer  since  April  1993.  Since
February 1991 he has served as Senior Vice President.

Mr. Mickus has served as Vice President and Treasurer since November 1985 and as
Secretary since June 1991.

Mr. Rau has served as Vice President and Controller since February 1991.
                                        8
<PAGE>
EMPLOYEES

At June 30, 1998 the Company had 3,200 employees.  The Company  currently has no
unionized  employees.  The Company  believes  that its  employee  relations  are
generally satisfactory.

Item 3. Legal Proceedings

The  Company is a party to various  legal  proceedings  arising in the  ordinary
course of business. While it is not feasible to predict the ultimate disposition
of these  matters,  it is the opinion of management  that their outcome will not
have a material adverse effect on the financial condition of the Company.

Item 4. Submission of Matters to a Vote of Security Holders

None.
                                        9
<PAGE>
                                     PART II

Item 5. Market for the Registrant's Common Equity and Related Stockholder
        Matters

The Company's  common stock is listed on the New York Stock Exchange and Pacific
Stock Exchange under the trading  symbol (WBB).  The following  table sets forth
the high and low sales  prices  of the  Company's  common  stock on the New York
Stock Exchange for the two fiscal years ended June 30, 1998.

                                                Sales Price
--------------------------------------------------------------------------------
                             Fiscal Year 1998                Fiscal Year 1997
--------------------------------------------------------------------------------
Quarter Ended                High          Low             High           Low
--------------------------------------------------------------------------------
                            
September 30                21 3/8         16 3/8          19 3/4        16 1/4
December 31                 27 3/8         17 7/8          17 3/4        15 1/4
March 31                    34 7/8         24 5/16         17 7/8        15 1/4
June 30                     30 1/2         23              17            14 3/4
--------------------------------------------------------------------------------
                          
As of July 31,  1998 there were 2,876  shareholders  of record of the  Company's
common stock.

The  Company has paid  regular  quarterly  dividends  of $.05 Per share for each
quarter in the last five fiscal years.  The Company has announced that after the
$.05 Per share dividend to be paid in September 1998, it has no current plans to
make future  dividend  payments  and that it may utilize the capital  that would
otherwise  be paid as cash  dividends  to make  opportunistic  purchases  of its
common  stock.  The amount and timing of any future  dividends is subject to the
discretion of the Board of Directors.

The  Company is also  party to a loan  agreement  and  various  indentures  that
contain covenants restricting the Company's ability to pay dividends and acquire
its common stock.  Under the most  restrictive of these  covenants,  at June 30,
1998 $34.6 Million of the Company's retained earnings were available for payment
of cash dividends or for the acquisition by the Company of its common stock.
                                        10
<PAGE>
Item 6. Selected Consolidated Financial Data
     (Not covered by report of independent auditors)

The  following  tables set forth  selected  consolidated  financial  data of the
Company as of and for each of the five fiscal  years ended June 30,  1998.  They
should be read in conjunction  with the  Consolidated  Financial  Statements and
Notes thereto and "Management's  Discussion and Analysis of Financial  Condition
and Results of Operations."
<TABLE>
<CAPTION>
                                                           Dollars In Thousands Except Per Share Data
                                                                      Year Ended June 30,
----------------------------------------------------------------------------------------------------------
                                                       1998        1997       1996        1995      1994
----------------------------------------------------------------------------------------------------------
<S>                                                <C>         <C>         <C>          <C>       <C>
Statement of operations information:
Revenues:
  Home sales - communities                         $  879,825  $  906,523  $  794,671   $620,012  $405,462
  Home sales - conventional homebuilding              238,559     237,566     217,158    144,469    79,992
  Land and facility sales and other                    59,383      42,173      38,904     38,638    24,607
----------------------------------------------------------------------------------------------------------
  Total revenues                                   $1,177,767  $1,186,262  $1,050,733   $803,119  $510,061
==========================================================================================================
Earnings (loss):
  Before extraordinary item (1)                    $   42,533  $   39,686  $   (7,751)  $ 28,491  $ 17,021
  Total (2)                                            42,533      38,401      (7,751)    28,491    17,021
==========================================================================================================
Net earnings (loss) per share:
  Before extraordinary item (1)                    $     2.39  $     2.26  $     (.44)  $   1.92  $   1.15
  Total (2)                                              2.39        2.18        (.44)      1.92      1.15
==========================================================================================================
Net earnings (loss) per share-assuming dilution:
    Before extraordinary item (1)                  $     2.30  $     2.22  $     (.44)  $   1.87  $   1.13
    Total (2)                                            2.30        2.15        (.44)      1.87      1.13
==========================================================================================================
Cash dividends per share                           $      .20  $      .20  $      .20   $    .20  $    .20
==========================================================================================================
</TABLE>

(1)  In fiscal 1996, in  connection  with the adoption of Statement of Financial
     Accounting Standards ("SFAS") No. 121, the Company incurred a non-cash loss
     from  impairment  of southern  California  real estate  inventories  in the
     amount of $65.0 million  pre-tax  ($42.3  million after tax) related to the
     valuation of its Sun City Palm Desert active adult community.  Exclusive of
     the non-cash  loss,  the  Company's net earnings for fiscal 1996 were $34.5
     million ($2.01 per share or $1.96 per share - assuming dilution).

(2)  Earnings for fiscal 1997 include a $1.3 million extraordinary loss from the
     early extinguishment of debt.

                                       11
<PAGE>
Item 6. Selected Consolidated Financial Data (Continued)
       (Not covered by report of independent auditors)
<TABLE>
<CAPTION>
                                                               Dollars in Thousands
                                                                Year Ended June 30,
---------------------------------------------------------------------------------------------------------
                                               1998        1997        1996          1995        1994
---------------------------------------------------------------------------------------------------------
<S>                                         <C>         <C>         <C>          <C>          <C>
Balance sheet information at year-end:

  Total assets                              $1,310,462  $1,086,662  $1,024,795   $  925,050   $  758,424

  Notes payable and senior debt                167,608     222,881     320,063      284,585      189,657
  Subordinated debt                            536,330     340,187     194,614      206,673      206,019
                                            ----------  ----------  ----------   ----------   ----------
  Total notes payable, senior and
    subordinated debt                          703,938     563,068     514,677      491,258      395,676

  Shareholders' equity                      $  345,767  $  299,830  $  264,776   $  229,342   $  201,324

  Total notes payable, senior and
    subordinated debt ("Debt") divided by
    Debt and shareholders' equity                 67.1%       65.3%       66.0%        68.2%        66.3%
=========================================================================================================
</TABLE>
                                       12
<PAGE>
Items 7. and 7a. Management's Discussion and Analysis of Financial Condition
                 and Results of Operations

The following discussion of results of operations and financial condition should
be read in  conjunction  with the Selected  Consolidated  Financial Data and the
Consolidated Financial Statements and Notes thereto.

CERTAIN CONSOLIDATED FINANCIAL AND OPERATING DATA
-------------------------------------------------

Set forth below is certain  consolidated  financial  and  operating  data of the
Company as of and for each of the three fiscal years ended June 30, 1998.
<TABLE>
<CAPTION>
                                               Year Ended               Change              Change
                                                June 30,             1998 vs 1997        1997 vs 1996
------------------------------------------------------------------ ----------------   -----------------
                                         1998     1997      1996   Amount   Percent   Amount    Percent
------------------------------------------------------------------ ----------------   -----------------
<S>                                      <C>      <C>      <C>      <C>    <C>        <C>        <C>   
OPERATING DATA:
 Number of net new orders(1):
   Sun Cities Phoenix(2)                 1,245    1,271      963     (26)    (2.0%)    308        32.0%
   Sun Cities Las Vegas(3)               1,179    1,091    1,241      88      8.1%    (150)      (12.1%)
   Sun City Palm Desert                    443      262      216     181     69.1%      46        21.3%
   Sun City Roseville                      739      553      537     186     33.6%      16         3.0%
   Sun City Hilton Head                    396      337      349      59     17.5%     (12)       (3.4%)
   Sun City Georgetown                     437      440      491      (3)    (0.7%)    (51)      (10.4%)
   Florida communities(4)                  240      N/A      N/A     240      N/A      N/A         N/A
   Other communities(5)                    270      N/A      N/A     270      N/A      N/A         N/A
   Coventry Homes                        1,334    1,179    1,249     155     13.1%     (70)       (5.6%)
----------------------------------------------------------------   --------------     ----------------
       Total current communities         6,283    5,133    5,046   1,150     22.4%      87         1.7%
 Completed operations:
   Sun City Tucson(6)                      N/A       58      160     (58)  (100.0%)   (102)      (63.8%)
   Terravita(7)                            N/A      226      431    (226)  (100.0%)   (205)      (47.6%)
   Coventry Homes-Southern California(8)   N/A      180      213    (180)  (100.0%)    (33)      (15.5%)
----------------------------------------------------------------   --------------     ----------------
       Total                             6,283    5,597    5,850     686     12.3%    (253)       (4.3%)
================================================================   ==============     ================
Number of home closings:
   Sun Cities Phoenix(2)                 1,268    1,132      912     136     12.0%     220        24.1%
   Sun Cities Las Vegas(3)               1,164    1,200    1,001     (36)    (3.0%)    199        19.9%
   Sun City Palm Desert                    304      248      251      56     22.6%      (3)       (1.2%)
   Sun City Roseville                      637      650      731     (13)    (2.0%)    (81)      (11.1%)
   Sun City Hilton Head                    386      371      305      15      4.0%      66        21.6%
   Sun City Georgetown                     448      616      235    (168)   (27.3%)    381       162.1%
   Florida communities(4)                  170      N/A      N/A     170      N/A      N/A         N/A
   Other communities(5)                    106      N/A      N/A     106      N/A      N/A         N/A
   Coventry Homes                        1,285    1,293    1,204      (8)    (0.6%)     89         7.4%
----------------------------------------------------------------   --------------     ----------------
       Total current communities         5,768    5,510    4,639     258      4.7%     871        18.8%
   Completed operations:
     Sun City Tucson(6)                    N/A      103      264    (103)  (100.0%)   (161)      (61.0%)
     Terravita(7)                          120      410      425    (290)   (70.7%)    (15)       (3.5%)
     Coventry Homes-Southern California(8)  20      183      203    (163)   (89.1%)    (20)       (9.9%)
----------------------------------------------------------------   --------------     ----------------
       Total                             5,908    6,206    5,531    (298)    (4.8%)    675        12.2%
================================================================   ==============     ================
</TABLE>
                                       13
<PAGE>
Items 7. and 7a. Management's Discussion and Analysis of Financial Condition
                 and Results of Operations (Continued)

CERTAIN CONSOLIDATED FINANCIAL AND OPERATING DATA (Continued)
-------------------------------------------------------------
<TABLE>
<CAPTION>
                                                        Year Ended                Change             Change
                                                         June 30,              1998 vs 1997       1997 vs 1996
-------------------------------------------------------------------------    ---------------   ----------------
                                                 1998      1997      1996    Amount  Percent   Amount   Percent
-------------------------------------------------------------------------    ---------------   ----------------
<S>                                          <C>       <C>       <C>       <C>        <C>    <C>        <C>    
BACKLOG DATA:                                
  Homes under contract at June 30:           
   Sun Cities Phoenix(2)                          669       692       553      (23)   (3.3%)     139     25.1%
   Sun Cities Las Vegas(3)                        548       533       642       15     2.8%     (109)   (17.0%)
   Sun City Palm Desert                           265       126       112      139   110.3%       14     12.5%
   Sun City Roseville                             382       280       377      102    36.4%      (97)   (25.7%)
   Sun City Hilton Head                           169       159       193       10     6.3%      (34)   (17.6%)
   Sun City Georgetown                            191       202       378      (11)   (5.4%)    (176)   (46.6%)
   Florida communities(4)                         275       N/A       N/A      275     N/A       N/A      N/A
   Other communities(5)                           164       N/A       N/A      164     N/A       N/A      N/A
   Coventry Homes                                 507       458       572       49    10.7%     (114)   (19.9%)
-------------------------------------------------------------------------  ---------------   ----------------
       Total current communities                3,170     2,450     2,827      720    29.4%     (377)   (13.3%)
 Completed operations:                       
   Sun City Tucson(6)                             N/A       N/A        45      N/A     N/A       (45)  (100.0%)
   Terravita(7)                                   N/A       120       304     (120) (100.0%)    (184)   (60.5%)
   Coventry Homes-Southern California(8)          N/A        20        23      (20) (100.0%)      (3)   (13.0%)
-------------------------------------------------------------------------  ---------------   ----------------
       Total(9)                                 3,170     2,590     3,199      580    22.4%     (609)   (19.0%)
=========================================================================  ===============   ================
Aggregate contract sales amount              
 (dollars in millions)                       $    642  $    514  $    617  $   128    24.9%  $  (103)   (16.7%)
Aggregate contract sales amount              
 per home (dollars in thousands)             $    203  $    198  $    193  $     5     2.5%  $     5      2.6%
=========================================================================  ===============   ================
AVERAGE REVENUE PER HOME                     
 CLOSING:                                    
   Sun Cities Phoenix(2)                     $157,400  $158,900  $160,300  $(1,500)   (0.9%) $(1,400)    (0.9%)
   Sun Cities Las Vegas(3)                    202,400   182,900   171,000   19,500    10.7%   11,900      7.0%
   Sun City Palm Desert                       234,000   221,100   224,100   12,900     5.8%   (3,000)    (1.3%)
   Sun City Roseville                         219,200   215,800   217,800    3,400     1.6%   (2,000)    (0.9%)
   Sun City Hilton Head                       173,100   168,100   159,200    5,000     3.0%    8,900      5.6%
   Sun City Georgetown                        201,000   183,100   181,500   17,900     9.8%    1,600      0.9%
   Florida communities(4)                      97,900       N/A       N/A      N/A     N/A       N/A      N/A
   Other communities(5)                       218,200       N/A       N/A      N/A     N/A       N/A      N/A
   Coventry Homes                             182,700   153,700   139,500   29,000    18.9%  (14,200)   (10.2%)
     Weighted average current communities     186,800   175,700   170,700   11,100     6.3%    5,000      2.9%
   Completed operations:                     
     Sun City Tucson(6)                           N/A   167,000   170,600      N/A     N/A    (3,600)    (2.1%)
     Terravita(7)                             310,200   292,100   295,600   18,100     6.2%   (3,500)    (1.2%)
     Coventry Homes-Southern California(8)    186,600   211,900   242,400  (25,300)  (11.9%) (30,500)   (12.6%)
     Weighted average                        $189,300  $184,400  $182,900  $ 4,900     2.7%  $ 1,500      0.8%
=========================================================================  ===============   ================
</TABLE>                                     
                                       14  
<PAGE>
Items 7. and 7a. Management's Discussion and Analysis of Financial Condition
                 and Results of Operations (Continued)

CERTAIN CONSOLIDATED FINANCIAL AND OPERATING DATA (Continued)
-------------------------------------------------------------
<TABLE>
<CAPTION>
                                                 Year Ended              Change            Change
                                                  June 30,             1998 vs 1997     1997 vs 1996
-----------------------------------------------------------------    ---------------   ---------------
                                             1998    1997    1996    Amount  Percent   Amount  Percent
-----------------------------------------------------------------    ---------------   ---------------
<S>                                         <C>     <C>     <C>       <C>     <C>      <C>      <C> 
OPERATING STATISTICS:                        
 Costs and expenses as a percentage of       
  revenues:                                  
   Home construction, land and other         76.3%   77.0%   76.9%     (0.7%)  (0.9%)    0.1%     0.1%
   Interest                                   3.9%    4.2%    4.0%     (0.3%)  (7.1%)    0.2%     5.0%
   Selling, general and administrative       14.1%   13.6%   14.0%      0.5%    3.7%    (0.4%)   (2.9%)
 Ratio of home closings to homes under       
   contract in backlog at beginning          
   of year                                  228.1%  194.0%  192.0%     34.1%   17.6%     2.0%     1.0%
==================================================================    =============    ==============
</TABLE>                                     
                                             
(1)  Net of cancellations. The Company recognizes revenue at close of escrow.

(2)  Includes  Sun City West and Sun City Grand.  The Company  began  taking new
     home sales orders at Sun City Grand in October 1996. Home closings began at
     Sun City Grand in February 1997.

(3)  Includes Sun City Summerlin and Sun City Macdonald Ranch.

(4)  In january 1998 the Company  acquired  certain  assets and assumed  certain
     liabilities at two operating age-qualified  communities in central Florida.
     Included  in this  acquisition  was a  backlog  of 205  homes at these  two
     communities at the date of acquisition.

(5)  Represents  three  smaller-scale  communities  in Arizona and California at
     which net new order activity began in september, October and November 1997.
     Home closings began at these communities in March, April and May 1998.

(6)  The Company completed net new order activity at Sun City Tucson in February
     1997. Home closings at Sun City Tucson were completed in April 1997.

(7)  The Company  completed  net new order  activity at terravita in April 1997.
     Home closings at Terravita were completed in may 1998.

(8)  The  Company  completed  net new  order  activity  for its  Coventry  Homes
     southern  California  operations  in June  1997.  Home  closings  for these
     operations were completed in August 1997.

(9)  A majority  of the  backlog at June 30, 1998 is  currently  anticipated  to
     result in  revenues  in the next 12  months.  However,  a  majority  of the
     backlog is contingent  primarily upon the availability of financing for the
     customer and, in certain cases, sale of the customer's  existing  residence
     or other factors.  Also, as a practical matter, in most cases the Company's
     ability to obtain  damages for breach of contract by a potential home buyer
     is limited to retaining  all or a portion of the deposit  received.  In the
     years  ended  June 30,  1998,  1997 and 1996,  cancellations  of home sales
     orders as a  percentage  of new home sales orders  written  during the year
     were  13.9  Percent,  17.1  Percent  and 17.2  Percent,  respectively.  See
     "Business and Properties -- Forward Looking Information; Certain Cautionary
     Statements."
                                       15
<PAGE>
Items 7. and 7a. Management's Discussion and Analysis of Financial Condition
                 and Results of Operations (Continued)

RESULTS OF OPERATIONS
---------------------

REVENUES. Revenues decreased slightly to $1.18 billion for the fiscal year ended
June 30, 1998 from $1.19  billion for the fiscal year ended June 30, 1997.  This
decrease  was  due to the  decreased  closings  at  Terravita,  Coventry  Homes'
southern California operations and Sun City Tucson, reflecting the completion of
those operations. Largely offsetting the effect of these decreased closings were
revenues from the commencement in fiscal 1998 of community operations in Florida
and at three smaller-scale communities in Arizona and California, an increase in
the average  revenue  per home  closing  and  revenues  from the sale of certain
facilities (a shopping center and golf course) in connection with the completion
of operations at Terravita.

Revenues  increased  to $1.19  billion  for fiscal  1997 from $1.05  billion for
fiscal 1996.  Increased home closings at Sun City Georgetown and Sun City Hilton
Head (two  communities  at which the Company had home  closings for only part of
fiscal 1996) accounted for $69.2 million and $10.5 million, respectively, of the
increase. Increased home closings at the Sun Cities Las Vegas (where the Company
had home closings at Sun City MacDonald Ranch for only part of fiscal 1996), the
Sun Cities  Phoenix  (where home  closings did not begin at Sun City Grand until
February  1997) and Coventry Homes (due mainly to the expansion of operations in
the Las  Vegas  area)  accounted  for $34.0  million,  $35.3  million  and $10.6
million,  respectively,  of the increase in revenues. Decreased home closings at
Sun City  Roseville  (reflecting  the decrease in net new orders  experienced at
that  community  in the  first  quarter  of  fiscal  1997)  and Sun City  Tucson
(reflecting the completion of that community)  resulted in decreased revenues of
$17.6 million and $27.5 million, respectively.

An increase in the average revenue per home closing  resulted in a $23.0 million
increase in revenues  from fiscal 1996 to fiscal 1997.  This increase in average
revenue per home closing was primarily due to changes in mix of product and home
closings  among  the  Company's   communities  and   conventional   homebuilding
operations  and to increases  in lot premiums and optional  upgrades in homes at
certain communities.

HOME CONSTRUCTION, LAND AND OTHER COSTS. The decrease in home construction, land
and other costs to $898.8 million for fiscal 1998 compared to $913.9 million for
fiscal 1997 was primarily due to the decrease in home closings. These costs as a
percentage  of revenues  decreased to 76.3  percent for fiscal 1998  compared to
77.0  percent  for fiscal  1997,  with the  decrease  primarily  due to improved
margins on land and facility  sales.  The improved  margins on land and facility
sales were largely due to the declining  volume of lower-margin  land sales at a
substantially complete residential land development project in Phoenix. A higher
profit  margin on home closings was also realized as a result of a change in mix
of product  and home  closings  among the  Company's  conventional  homebuilding
operations.

The increase in home  construction,  land and other costs to $913.9  million for
fiscal 1997  compared to $808.0  million for fiscal 1996 was due to the increase
in home closings. As a percentage of revenues, these costs were 77.0 percent for
fiscal 1997 and 76.9 percent for fiscal 1996.

On a  period-to-period  basis,  home  construction,  land and  other  costs as a
percentage of revenues will vary due to, among other things,  changes in product
mix,  differences  between  individual  communities,   lot  premiums,   optional
upgrades, price increases and changes in construction costs.

SELLING,  GENERAL AND  ADMINISTRATIVE  EXPENSES.  As a  percentage  of revenues,
selling,  general and  administrative  expenses  increased  to 14.1  percent for
fiscal 1998 compared to 13.6 percent for the 1997 period.  This increase was due
primarily   to  increased   corporate   overhead  to   investigate   new  market
opportunities and support an increased number of pre-operating communities.

As a  percentage  of  revenues,  selling,  general and  administrative  expenses
decreased  to 13.6  percent for fiscal 1997  compared to 14.0 percent for fiscal
1996.  This  decrease  resulted  from the  spreading of corporate  overhead over
greater revenues.

INTEREST. As a percentage of revenues,  amortization of capitalized interest was
3.9  percent for fiscal 1998  compared  to 4.2  percent  for fiscal  1997.  This
decrease was primarily due to an increase in pre-operating communities, at which
interest  is  being  capitalized  on  qualified  assets  but at  which  interest
amortization on home closings has not yet begun.
                                       16
<PAGE>
Items 7. and 7a. Management's Discussion and Analysis of Financial Condition
                 and Results of Operations (Continued)

As a  percentage  of  revenues,  amortization  of  capitalized  interest was 4.2
percent for fiscal 1997  compared to 4.0 percent for fiscal  1996.  The increase
was  primarily  due to the  fiscal  1996  adoption  of  Statement  of  Financial
Accounting  Standards  ("SFAS")  No.  121,  Accounting  for  the  Impairment  of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of, which,  after the
writedown  of  certain  assets,  resulted  in a new  allocation  of  capitalized
interest to remaining  assets.  This resulted in an increase in  amortization of
capitalized  interest as a percentage of revenues.  See "Loss From Impairment of
Southern California Real Estate Inventories."

LOSS  FROM  IMPAIRMENT  OF  SOUTHERN  CALIFORNIA  REAL  ESTATE  INVENTORIES.  In
connection  with its  adoption  of SFAS No.  121 in  fiscal  1996,  the  Company
incurred a non-cash  loss from  impairment  of southern  California  real estate
inventories  in the amount of $65.0 million  pre-tax  ($42.3  million after tax)
related to the  valuation of its Sun City Palm Desert  active  adult  community.
Exclusive of the non-cash  loss, the Company's net earnings for fiscal 1996 were
$34.5 million ($2.01 per share or $1.96 per share - assuming dilution).

In the first six months of fiscal  1996,  net new orders at Sun City Palm Desert
were substantially below both the comparable period of the prior fiscal year and
the  Company's  expectations.  Although  the Company was  encouraged  by net new
orders significantly greater in the first 45 days of the third quarter of fiscal
1996 than in the  comparable  period  in the prior  fiscal  year,  a lower  than
anticipated level of net new orders was expected in the remainder of fiscal 1996
and net new orders for all of fiscal 1996 were  anticipated  to be lower than in
prior fiscal  years.  Additionally,  a national  home builder was  developing an
active  adult  community  near Sun City Palm Desert  which was expected to cause
additional  competitive  pressures at that  community.  Based on these and other
factors,  the Company  reduced its  estimate  with respect to net new orders and
closings in the fiscal  years ending June 30,1997 and beyond to below the levels
achieved  in the three  fiscal  years  ended June 30,  1995.  This  resulted  in
expected future net cash flows  (undiscounted  and without interest  charges) at
Sun City Palm Desert being less than the book value of the asset. As required by
SFAS No. 121, the Company therefore recorded in fiscal 1996 a non-cash loss from
impairment of southern  California  real estate  inventories to reflect Sun City
Palm Desert at its estimated fair value.  Fair value was estimated based upon an
evaluation  of  comparable  market prices and  discounted  expected  future cash
flows.  Although the Company has  experienced  improvement in net new orders and
home closings in fiscal 1998,  restoration of previously  recognized  impairment
losses on assets to be held and used is prohibited by SFAS No. 121.

The Company owns  additional  land for a second phase of development at Sun City
Palm Desert.  The Company has recently  decided to move forward with development
of a  portion  of  this  second  phase.  Development  of  subsequent  phases  of
large-scale  real estate  projects is assessed in light of  conditions  existing
when  construction  of the  phase is to  begin.  Any  decision  to  develop  the
remainder of the second phase at this  community will depend on the state of the
economy and  prospects  for this  community  at the time the current  phases are
nearing completion.

INCOME  TAXES.  The  increase  in income  taxes to $23.9  million in fiscal 1998
compared  to $22.3  million in fiscal  1997 was due to the  increase in earnings
before income taxes. The effective tax rate in both fiscal years was 36 percent.

The increase in income taxes to a $22.3 million  expense in fiscal 1997 compared
to a $4.2  million  benefit  for fiscal  1996 was due to the change in  earnings
(loss) before income taxes and  extraordinary  item. The effective tax rate also
increased to 36 percent from 35 percent.

EXTRAORDINARY  ITEM.  In  connection  with the  early  redemption  of all of the
Company's  $100 million of  outstanding  107/8% Senior Notes at par on March 31,
1997, an extraordinary loss of $1.3 million was recognized in fiscal 1997.

NET EARNINGS  (LOSS).  The increase in net earnings to $42.5  million for fiscal
1998 from  $38.4  million  for fiscal  1997 was  primarily  attributable  to the
increase in earnings from land and facility sales.  Largely due to the sale of a
golf course and  shopping  center at  Terravita,  earnings  before  income taxes
attributable  to land and facility  sales  increased to $15.0 million for fiscal
1998  compared to $5.2  million for fiscal 1997.  Land and facility  sales are a
normal  part  of  the  Company's  operations  but  occur  irregularly  and  vary
significantly in magnitude, complicating period-to-period comparisons.
                                       17
<PAGE>
Items 7. and 7a. Management's Discussion and Analysis of Financial Condition
                 and Results of Operations (Continued)

The Company had net earnings of $38.4  million in fiscal 1997  compared to a net
loss of $7.8 million in fiscal  1996,  primarily  due to the non-cash  loss with
respect to southern  California real estate inventories  incurred by the Company
in fiscal  1996.  Excluding  this  non-cash  loss in fiscal  1996,  net earnings
increased by $3.9 million (11.3 percent),  while home closings  increased by 675
units (12.2 percent) and revenues  increased by $135.5  million (12.9  percent).
The overall less-than-proportionate increase in net earnings was attributable to
the extraordinary loss recognized by the Company in fiscal 1997.

NET NEW ORDER  ACTIVITY  AND  BACKLOG.  Total net new orders in fiscal 1998 were
12.3 percent higher than in fiscal 1997. Net new orders at operations  that were
selling homes in both fiscal 1998 and fiscal 1997 increased 12.5 percent.

The  increase  in total net new orders was largely  due to the  commencement  of
Florida community operations in January 1998 and net new order activity at three
smaller-scale  communities  in Arizona  and  California  in fiscal  1998.  These
increases  were  partially  offset  by  declines  attributable  to the  recently
completed   operations  of  Terravita,   Coventry  Homes'  southern   California
operations and Sun City Tucson.

The increase in net new orders at  operations  that were  selling  homes in both
fiscal 1998 and fiscal 1997 was largely due to increases  at Sun City  Roseville
and Sun City Palm  Desert,  which  management  believes may be  attributable  to
continued  improvement  in the  California  real estate  economy and its economy
generally,  as well as to the  introduction of new models.  Management  believes
that the  increase  in net new  orders at the Sun Cities Las Vegas is due to the
continued strength of the Las Vegas market. At Sun City Hilton Head,  management
believes  that the increase in net new orders may be  partially  due to the fact
that  important   commercial  and  service-related   businesses  have  announced
development plans for the area adjacent to Sun City Hilton Head. Coventry Homes'
net new orders increased as a result of increases in Phoenix and Las Vegas.

The number of homes under contract at June 30, 1998 was 22.4 percent higher than
at June 30, 1997. Management believes that this backlog increase was largely due
to the same  factors  that  produced  the  increase in net new  orders.  Backlog
decreases  were  experienced  at the Sun Cities  Phoenix (where Sun City West is
approaching completion) and Sun City Georgetown (where management believes sales
have leveled after satisfaction of initial local pent-up demand).

Net new orders in fiscal  1997 were 4.3  percent  lower than in fiscal  1996.  A
significant  increase was realized at the Sun Cities  Phoenix as a result of new
order activity at Sun City Grand, which began taking new orders in October 1996.
Net new orders at Sun City Tucson and  Terravita  declined 63.8 percent and 47.6
percent,   respectively,   from  fiscal  1996,   reflecting  the  completion  or
approaching  completion of those  communities.  Net new orders at the Sun Cities
Las Vegas declined 12.1 percent from a particularly strong fiscal 1996. Coventry
Homes also  experienced a 7.0 percent  decrease in net new orders as a result of
having fewer communities open in fiscal 1997 than in fiscal 1996.

The number of homes under  contract at June 30, 1997 was 19.0 percent lower than
at June 30, 1996.  This backlog  decrease was due primarily to decreases at: Sun
City  Roseville (as a result of a decline in net new orders in the first quarter
of fiscal  1997 and a high  level of home  closings  in fiscal  1997);  Sun City
Georgetown  and  Coventry  Homes (as their net new orders did not keep pace with
home closings in fiscal 1997);  and Sun City Tucson and Terravita  (attributable
to the completion or approaching completion of those communities).
                                       18
<PAGE>
Items 7. and 7a. Management's Discussion and Analysis of Financial Condition
                 and Results of Operations (Continued)

LIQUIDITY AND FINANCIAL CONDITION OF THE COMPANY
------------------------------------------------

The cash flow for each of the  Company's  communities  can differ  substantially
from reported  earnings,  depending on the status of the development  cycle. The
initial years of development or expansion require  significant cash outlays for,
among other things, land acquisition, obtaining master plan and other approvals,
construction of amenities (including golf courses and recreation centers), model
homes,  sales and administration  facilities,  major roads,  utilities,  general
landscaping and interest. Since these costs are capitalized,  this can result in
income  reported for  financial  statement  purposes  during those initial years
significantly   exceeding  cash  flow.  However,  after  the  initial  years  of
development  or  expansion,  when  these  expenditures  are made,  cash flow can
significantly  exceed earnings  reported for financial  statement  purposes,  as
costs and  expenses  include  amortization  charges for  substantial  amounts of
previously expended costs.

During  fiscal  1998 the  Company  generated  $363.3  million  of net cash  from
community  sales  activities,  used $169.7  million of cash for land and lot and
amenity  development  at operating  communities,  paid $162.9  million for costs
related to communities in the  pre-operating  stage,  generated $21.4 million of
net cash from  conventional  homebuilding  operations and used $122.7 million of
cash for other  operating  activities.  The resulting  $70.6 million of net cash
used for operating activities (which was primarily  attributable to expenditures
for communities not yet generating home sales revenues) was funded mainly by the
net  proceeds  from the May 1998 public  offering of $200  million in  principal
amount  of 9 3/8% Senior  Subordinated  Debentures  due  2009  (the  "1998  Debt
Offering"). The net proceeds from the 1998 Debt Offering were also used to repay
a portion of the indebtedness  outstanding  under the Company's senior unsecured
revolving credit facility (the "Credit Facility").

In January  1998 the  amount of the  Credit  Facility  was  increased  from $350
million to $400 million.  In June 1998 the Credit Facility was amended to revise
certain debt-related covenants and increase the amount of the Credit Facility to
$450 million, all of which is available for borrowing,  subject to compliance by
the Company with the revised  covenants.  At June 30, 1998 the Company had $14.4
million of cash and short-term investments,  $96.0 million outstanding under the
Credit  Facility  and  $15.2  million  outstanding  under  its  $25  million  of
short-term lines of credit.

The Company is currently  experiencing a period of substantial  development.  It
has under development, among other projects: (i) Sun City Lincoln Hills, planned
as the  successor  to Sun City  Roseville;  (ii)  Anthem Las  Vegas,  which will
include Sun City Anthem (planned as the successor to Sun City Summerlin), Anthem
Country Club (a non-age-qualified golf course community) and a conventional home
building component (Coventry Anthem); (iii) Anthem Phoenix, planned to include a
non-age-qualified  country  club  community  and a  conventional  home  building
component and which may also include an active adult  community at a later date;
and (iv) Sun City at Huntley,  located in Huntley,  Illinois (near Chicago). The
Company currently  anticipates that it will incur material additional debt under
the Credit Facility for development expenditures at these communities.

As a result of the 1998 Debt Offering and anticipated  future  borrowings  under
the Credit Facility, the Company expects to be more highly leveraged than it has
been in recent years.  The  Company's  degree of leverage from time to time will
affect its  interest  incurred  and  capital  resources,  which  could limit its
ability to capitalize on business opportunities or withstand adverse changes. If
the Company cannot at any time obtain  sufficient  capital resources to fund its
development and expansion expenditures,  its projects may be delayed,  resulting
in cost increases,  adverse  effects on the Company's  results of operations and
possible  material adverse effects to the Company.  No assurance can be given as
to the terms, availability or cost of any future financing the Company may need.
If the  Company  is at any time  unable  to  service  its debt,  refinancing  or
obtaining  additional  financing  may be required  and may not be  available  or
available on terms acceptable to the Company.

Management believes that the Company's current borrowing capacity, when combined
with existing cash and short-term  investments  and currently  anticipated  cash
flows from the Company's  operating  communities and  conventional  homebuilding
activities, will provide the Company with adequate capital resources to fund the
Company's currently anticipated  operating  requirements for the next 12 months.
However, these operating requirements reflect some limitations on the timing and
extent of new projects and activities  that the Company may otherwise  desire to
undertake.
                                       19
<PAGE>
Items 7. and 7a. Management's Discussion and Analysis of Financial Condition
                 and Results of Operations (Continued)

At June 30, 1998,  under the most  restrictive of the covenants in the Company's
debt agreements,  $34.6 million of the Company's retained earnings was available
for  payment of cash  dividends  or for the  acquisition  by the  Company of its
common stock.

MARKET RISK FOR FINANCIAL INSTRUMENTS
-------------------------------------

The Company does not trade in derivative  financial  instruments and at June 30,
1998 had no significant derivative financial instruments.  The Company does have
other  financial  instruments,  for purposes other than trading,  in the form of
notes payable,  senior and subordinated  debt. The Company's  publicly held debt
and some real estate and other notes are at fixed interest rates.  The Company's
Credit Facility, short-term lines of credit and some real estate and other notes
are at variable  interest  rates and are thus subject to market risk in the form
of fluctuations in interest rates.

The following table provides  interest rate  sensitivity  information  about the
Company's notes payable,  senior and subordinated debt at June 30, 1998 (dollars
in millions):
<TABLE>
<CAPTION>
                          Amount by Scheduled Maturity for                                
                          --------------------------------                                Estimated
                            Fiscal Years Ending June 30,                                 Fair Value
                            ----------------------------                                     at
                         1999    2000    2001     2002     2003    Thereafter   Total   June 30, 1998
                         ----    ----    ----     ----     ----    ----------   -----   -------------
<S>                      <C>     <C>    <C>      <C>     <C>         <C>        <C>        <C>
Fixed Rate Debt
---------------
Amount                   $ 7.8   $2.9   $2.4     $ 3.3   $108.4      $444.6     $569.4     $583.3

Average Interest Rate      8.0%   8.0%   7.9%      8.1%     9.5%        9.4%       9.4%

Variable Rate Debt
------------------
Amount                   $38.2     --     --     $96.0       --      $  0.3     $134.5     $134.5

Average Interest Rate      8.7%    --     --       8.5%      --         9.5%       8.6%
</TABLE>

YEAR 2000 ISSUE
---------------

The Year 2000 issue is the result of computer  programs  being written using two
digits (rather than four) to define the applicable year.  Computer programs that
have time-sensitive software may not recognize dates beginning in the year 2000,
which could result in miscalculations or system failures.

To date,  the Company's Year 2000  remediation  efforts have focused on its core
business  computer  applications  (i.e.,  those  systems  that  the  Company  is
dependent  upon for the conduct of  day-to-day  business  operations).  Starting
approximately two years ago, the Company initiated a comprehensive review of its
core  business  applications  to determine the adequacy of these systems to meet
future business  requirements.  Year 2000 readiness was only one of many factors
considered  in this  assessment.  Out of this  effort,  a number of systems were
identified  for upgrade or  replacement.  In no case is a system being  replaced
solely because of Year 2000 issues,  although in some cases the timing of system
replacements is being accelerated.  Thus, the Company does not believe the costs
of these system  replacements are specifically Year 2000 related.  Additionally,
while the Company may have incurred an opportunity  cost for addressing the Year
2000  issue,  it does not  believe  that  any  specific  information  technology
projects have been deferred as a result of its Year 2000 efforts.
                                       20
<PAGE>
Items 7. and 7a. Management's Discussion and Analysis of Financial Condition
                 and Results of Operations (Continued)

As of August 1998,  the Company  believes all of its core  business  systems are
adequately Year 2000 capable for its purposes,  except for its lead tracking and
mortgage  processing systems and some of its document imaging systems.  Projects
are currently  underway to replace each of these systems,  with  implementations
and testing scheduled for the remainder of calendar year 1998 and early 1999. As
with systems that have already been  replaced,  the Company does not believe the
costs of these  replacements,  which  aggregate  approximately  $1 million,  are
specifically  Year  2000 related.  The Company has also  purchased  at a cost of
approximately  $100,000 a software  product  that,  it  believes,  can  identify
personal  computers and related  equipment  with  imbedded  software that is not
adequately Year 2000 capable for the Company's purposes.  The Company expects to
incur  costs to replace or repair  such  equipment,  but it has not at this time
determined  the  amount  of  these  costs.  Since  some of the  equipment  would
otherwise be replaced through normal attrition,  lease expirations and scheduled
upgrades in the ordinary  course of business,  it is possible that much of these
costs would not be solely related to Year 2000 readiness.

The Company is currently  assessing other potential Year 2000 issues,  including
non-information  technology systems. A broad-based Year 2000 Task Force has been
formed and began meeting in August 1998 to identify areas of concern and develop
action plans. The Company currently  anticipates that testing of non-information
technology systems will be completed by mid-1999. Also as part of the Task Force
effort,  the  Company's  relationships  with  vendors,  contractors,   financial
institutions and other third parties will be examined to determine the status of
the Year  2000  issue  efforts  on the part of the  other  parties  to  material
relationships.   The  Year  2000  Task  Force   includes   both   internal   and
Company-external representation.

The Company expects to incur Year 2000-specific costs in the future but does not
at present  anticipate that these costs will be material.  The Company  believes
that the most  reasonably  likely  worst-case  scenario  for the Year 2000 issue
would be that the Company or the third  parties  with whom it has  relationships
would cease or not successfully complete their Year 2000 remediation efforts. If
this were to occur, the Company would encounter disruptions to its business that
could have a material  adverse effect on its results of operations.  The Company
could  be  materially  impacted  by  widespread  economic  or  financial  market
disruption or by Year 2000 computer  system  failures at government  agencies on
which the Company is dependent for zoning, building permits and related matters.

The Company has not at this time established a formal Year 2000 contingency plan
but will consider  and, if necessary,  address doing so as part of its Year 2000
Task Force  activities.  The Company  maintains  and deploys  contingency  plans
designed to address various other potential business interruptions.  These plans
may be  applicable  to address  the  interruption  of support  provided by third
parties resulting from their failure to be Year 2000 ready.

IMPACT OF INFLATION
-------------------

Operations  of the Company can be  impacted  by  inflation.  Home and land sales
prices can increase,  but inflation can also cause  increases in interest  costs
and the costs of land, raw materials and contract  labor.  Unless such increased
costs  are  recovered  through  higher  sales  prices,  operating  margins  will
decrease.  High mortgage  interest rates may also make it more difficult for the
Company's  potential  customers to sell their existing homes in order to move to
one of the Company's communities or to finance the purchases of their new homes.
                                       21
<PAGE>
Items 7. and 7a. Management's Discussion and Analysis of Financial Condition
                 and Results of Operations (Continued)

ACCOUNTING STANDARDS NOT YET ADOPTED BY THE COMPANY
---------------------------------------------------

The  Financial  Accounting  Standards  Board  ("FASB")  has issued  several  new
pronouncements that have not yet been adopted by the Company.

In June 1997 the FASB issued SFAS No. 130,  Reporting  Comprehensive  Income, to
establish  standards  for  reporting  and display of  comprehensive  income (all
changes in equity during a period except those resulting from investments by and
distributions  to owners) and its components in financial  statements.  This new
standard,  which will be  effective  for the  Company for its fiscal year ending
June 30, 1999, is not currently  anticipated to have a significant impact on the
Company's  consolidated  financial  statements  based on the  current  financial
structure and operations of the Company.

In June 1997 the FASB  issued  SFAS No. 131,  Disclosures  about  Segments of an
Enterprise  and  Related  Information,  to  establish  standards  for  reporting
information about operating  segments in annual financial  statements,  selected
information   about  operating   segments  in  interim   financial  reports  and
disclosures  about products and services,  geographic areas and major customers.
This new  standard,  which will be effective for the Company for its fiscal year
ending June 30, 1999, will require the Company to report  financial  information
on the basis that is used  internally for  evaluating  segment  performance  and
deciding how to allocate resources to segments,  which is currently  anticipated
to  result  in  more  detailed   information  in  the  notes  to  the  Company's
consolidated financial statements than is currently required and provided.

In February  1998 the FASB issued SFAS No.  132,  Employers'  Disclosures  about
Pensions and Other  Postretirement  Benefits,  to  standardize  such  disclosure
requirements. This new standard, which will be effective for the Company for its
fiscal year ending June 30, 1999, is not expected to have a  significant  impact
on the Company's consolidated financial statements.

In June 1998 the FASB  issued  SFAS No.  133,  Accounting  for  Derivatives  and
Similar  Financial   Instruments  and  for  Hedging  Activities,   to  establish
accounting and reporting  standards in this area. This new standard,  which will
be effective  for the Company for its fiscal year ending June 30,  2000,  is not
expected to have a significant  impact on the Company's  consolidated  financial
statements since the Company does not have any significant  derivative financial
instruments.

Item 8. Financial Statements and Supplementary Data

The  response  to this item is  submitted  as a separate  section of this report
below.

Item 9. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure

None.
                                       22
<PAGE>
                                    PART III

Item 10. Directors and Executive Officers of the Registrant

For information  with respect to the Executive  Officers of the Registrant,  see
"Item  1 --  Executive  Officers  of the  Company"  at the end of Part I of this
report.  Information  with  respect  to  the  Directors  of  the  Registrant  is
incorporated herein by reference to the Registrant's  definitive proxy statement
to be filed pursuant to Regulation 14A within 120 days after the end of the most
recent fiscal year covered by this Form 10-K.

Item 11. Executive Compensation

Information in response to this Item is incorporated  herein by reference to the
Registrant's  definitive  proxy statement to be filed pursuant to Regulation 14A
within 120 days after the end of the most  recent  fiscal  year  covered by this
Form 10-K.

Item 12. Security Ownership of Certain Beneficial Owners and Management

Information in response to this Item is incorporated  herein by reference to the
Registrant's  definitive  proxy statement to be filed pursuant to Regulation 14A
within 120 days after the end of the most  recent  fiscal  year  covered by this
Form 10-K.


Item 13. Certain Relationships and Related Transactions

Information in response to this Item is incorporated  herein by reference to the
Registrant's  definitive  proxy statement to be filed pursuant to Regulation 14A
within 120 days after the end of the most  recent  fiscal  year  covered by this
Form 10-K.
                                       23
<PAGE>
                                     PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)  1. and 2. The  response to  this  portion of  Item 14 is  submitted  as a 
               separate section of this report beginning on page 26.

     3.        Exhibits

               The Exhibit  Index  attached to this Report is hereby
               incorporated by reference.

(b)  In the quarter  ended June 30, 1998 the Company filed three reports on Form
     8-K dated: (1) April 27, 1998 to file certain  financial and operating data
     for the three and nine months  ended  March 31,  1997 and 1998;  (2) May 8,
     1998 to file the  Underwriting  Agreement for the $200 million in principal
     amount of 9 3/8% Senior Subordinated Debentures due 2009 publicly issued by
     the Company in May 1998; and (3) May 11, 1998 to file the Indenture for the
     $200 million of 9 3/8% Senior Subordinated Debentures due 2009.
                                       24
<PAGE>
                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned,  who is duly authorized to do so, in Phoenix, Arizona
on the 11th day of September, 1998.

                                    DEL WEBB CORPORATION
                                    (Registrant)

                                    By: /s/ Philip J. Dion
                                       -----------------------------------------
                                            Philip J. Dion
                                            Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the  following  persons on behalf of the  registrant in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
   Signature                                Title                                          Date
--------------------------------------------------------------------------------------------------------

<S>                               <C>                                                 <C> 
/s/ Philip J. Dion                Chairman and Chief Executive Officer                September 11, 1998
------------------------------    (Principal Executive Officer)
   (Philip J. Dion)               

/s/ Leroy C. Hanneman, Jr.        President, Chief Operating Officer and Director     September 11, 1998
------------------------------    (Principal Operating Officer)
   (LeRoy C. Hanneman, Jr.)       

/s/ John A. Spencer               Senior Vice President and                           September 11, 1998
------------------------------    Chief Financial Officer      
   (John A. Spencer)              (Principal Financial Officer)
                                  
/s/ David E. Rau                  Vice President and Controller                       September 11, 1998
------------------------------    (Principal Accounting Officer) 
   (David E. Rau)                 

/s/ D. Kent Anderson              Director                                            September 11, 1998
------------------------------
   (D. Kent Anderson)

/s/ Michael O. Maffie             Director                                            September 11, 1998
------------------------------
   (Michael O. Maffie)

/s/ J. Russell Nelson             Director                                            September 11, 1998
------------------------------
   (J. Russell Nelson)

/s/ Peter A. Nelson               Director                                            September 11, 1998
------------------------------
   (Peter A. Nelson)

/s/ Michael E. Rossi              Director                                            September 11, 1998
------------------------------
   (Michael E. Rossi)

/s/ Glenn W. Schaeffer            Director                                            September 11, 1998
------------------------------
   (Glenn W. Schaeffer)

/s/ C. Anthony Wainwright         Director                                            September 11, 1998
------------------------------
   (C. Anthony Wainwright)

/s/ Sam Yellen                    Director                                            September 11, 1998
------------------------------
   (Sam Yellen)
</TABLE>
                                       25
<PAGE>
                              DEL WEBB CORPORATION
                                    FORM 10-K
                         Item 8, Item 14(a) (1) and (2)
             Index of Consolidated Financial Statements and Schedule


The following  financial  statements required to be included in Item 8 and other
disclosures by the Registrant are listed below:

<TABLE>
<CAPTION>
                                                                                                   PAGE

<S>                                                                                                <C>
Management's Report................................................................................ 27

Independent Auditors' Report....................................................................... 28

Consolidated Financial Statements:

        Balance Sheets as of June 30, 1998 and 1997................................................ 29

        Statements of Operations for each of the years in the three-year
          period ended June 30, 1998............................................................... 30

        Statements of Shareholders' Equity for each of the years in the
          three-year period ended June 30, 1998.................................................... 31

        Statements of Cash Flows for each of the years in the three-year
          period ended June 30, 1998............................................................... 32

        Notes to Consolidated Financial Statements................................................. 34
</TABLE>

The  following   financial   statement   schedule  of  the  Registrant  and  its
subsidiaries is included in Item 14(a) (2):

<TABLE>
<CAPTION>
                                                                                                   PAGE
Consolidated Financial Statement Schedule:
<S>                                                                                                <C>
        II  Valuation and Qualifying Accounts for each of the years in the
            three-year period ended June 30, 1998.................................................. 49
</TABLE>

Information  other than that  contained in the schedule  listed above is omitted
because the  conditions  requiring  filing do not exist or because the  required
information is given in the financial statements, including the notes thereto.
                                       26
<PAGE>
MANAGEMENT'S REPORT

Financial Statements

Del Webb  Corporation is  responsible  for the  preparation,  integrity and fair
presentation of its published financial statements.  The consolidated  financial
statements that follow have been prepared in accordance with generally  accepted
accounting  principles  and, as such,  include  amounts  based on judgments  and
estimates  made by management.  The Company also prepared the other  information
included  in  the  annual  report  and  is  responsible  for  its  accuracy  and
consistency with the consolidated financial statements.

The  consolidated  financial  statements  have been  audited by the  independent
accounting  firm, KPMG Peat Marwick LLP, which was given access to all financial
records and related data, including minutes of all meetings of shareholders, the
board of directors and  committees of the board.  The Company  believes that all
representations  made to the independent  auditors during their audit were valid
and  appropriate.  KPMG Peat  Marwick  LLP's audit  report is  presented  on the
following page.

Internal Control System

The Company maintains a system of internal control over financial  reporting and
over safeguarding of assets against unauthorized acquisition, use or disposition
which is designed to provide  reasonable  assurance to the Company's  management
and board of directors regarding the preparation of reliable published financial
statements  and such  asset  safeguarding.  The  system  includes  a  documented
organizational  structure and division of responsibility,  established  policies
and procedures  (including a code of conduct) which are communicated  throughout
the Company, and the selection,  training and development of employees. Internal
auditors  monitor  the  operation  of the  internal  control  system  and report
findings and  recommendations  to  management  and the board of  directors,  and
corrective  actions  are  taken  to  correct  deficiencies  if and as  they  are
identified.  The board,  operating through its audit committee which is composed
of  directors  who  are not  officers  or  employees  of the  Company,  provides
oversight to the financial reporting and asset safeguarding process.

Even an effective  internal  control  system,  no matter how well designed,  has
inherent  limitations  -- including  the  possibility  of the  circumvention  or
overriding of controls -- and therefore  can provide only  reasonable  assurance
with respect to financial statement preparation and asset safeguarding. Further,
because of changes in conditions, internal control system effectiveness may vary
over time.

The Company assessed its internal control system as of June 30, 1998 in relation
to criteria for effective internal control over financial reporting described in
"Internal Control -- Integrated Framework" issued by the Committee of Sponsoring
Organizations of the Treadway Commission.  Based on its assessment,  the Company
believes  that,  as of June 30,  1998,  its  system  of  internal  control  over
financial  reporting  and  over  safeguarding  of  assets  against  unauthorized
acquisition, use or disposition met those criteria.


/S/ PHILIP J. DION
-------------------------------------------------
Philip J. Dion
Chairman and Chief Executive Officer


/S/ JOHN A. SPENCER
-------------------------------------------------
John A. Spencer
Senior Vice President and Chief Financial Officer

June 30, 1998
                                       27
<PAGE>
                          Independent Auditors' Report
                          ----------------------------




The Board of Directors and Shareholders
Del Webb Corporation:

We have audited the  consolidated  financial  statements of Del Webb Corporation
and  subsidiaries  as listed in the  accompanying  index. In connection with our
audits  of the  consolidated  financial  statements,  we also have  audited  the
financial   statement   schedule  listed  in  the  accompanying   index.   These
consolidated  financial  statements  and  financial  statement  schedule are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these  consolidated  financial  statements  and  financial  statement
schedule based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the financial position of Del Webb Corporation
and  subsidiaries  as of June  30,  1998  and  1997,  and the  results  of their
operations and their cash flows for each of the years in the  three-year  period
ended June 30, 1998 in conformity with generally accepted accounting principles.
Also, in our opinion, the related financial statement schedule,  when considered
in relation to the basic  consolidated  financial  statements  taken as a whole,
presents fairly, in all material respects, the information set forth therein.

As  discussed in Notes 1 and 13 to the  consolidated  financial  statements,  in
fiscal  1996 the Company  changed its method of  accounting  for  impairment  of
long-lived  assets in  accordance  with the  adoption of  Statement of Financial
Accounting Standards No. 121.


                                                KPMG Peat Marwick LLP
Phoenix, Arizona
August 21, 1998
                                       28
<PAGE>
                      DEL WEBB CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             June 30, 1998 and 1997

<TABLE>
<CAPTION>
                                                                                In Thousands
------------------------------------------------------------------------------------------------------
                                                                           1998             1997
------------------------------------------------------------------------------------------------------

                                  Assets
------------------------------------------------------------------------------------------------------
<S>                                                                    <C>              <C>           
Real estate inventories (Notes 2, 6 and 12)                            $    1,113,297   $      939,684
Cash and short-term investments                                                14,362           24,715
Receivables (Note 3)                                                           41,498           28,892
Property and equipment, net (Note 4)                                           33,333           20,937
Deferred income taxes (Note 7)                                                      -            6,526
Other assets (Note 5)                                                         107,972           65,908
------------------------------------------------------------------------------------------------------
                                                                       $    1,310,462   $    1,086,662
======================================================================================================
                   Liabilities and Shareholders' Equity
------------------------------------------------------------------------------------------------------
Notes payable, senior and subordinated debt (Note 6)                   $      703,938   $      563,068
Contractor and trade accounts payable                                          78,114           70,827
Accrued liabilities and other payables                                         98,066           79,959
Home sale deposits                                                             80,332           69,476
Deferred income taxes (Note 7)                                                  4,245                -
Income taxes payable (Note 7)                                                       -            3,502
------------------------------------------------------------------------------------------------------
      Total liabilities                                                       964,695          786,832
------------------------------------------------------------------------------------------------------
Shareholders' equity:
  Common stock, $.001 par value.  Authorized 30,000,000
    shares; issued 18,107,606 shares and 17,691,118 shares
    at June 30, 1998 and 1997, respectively (Notes 8 and 9)                        18               18
  Additional paid-in capital (Note 8)                                         166,328          160,308
  Retained earnings (Note 6)                                                  184,890          145,922
------------------------------------------------------------------------------------------------------
                                                                              351,236          306,248
  Less cost of common stock in treasury, 124,509 shares
    at June 30, 1997 (Note 8)                                                       -           (1,914)
  Less deferred compensation (Note 9)                                          (5,469)          (4,504)
------------------------------------------------------------------------------------------------------
      Total shareholders' equity                                              345,767          299,830
------------------------------------------------------------------------------------------------------
                                                                       $    1,310,462   $    1,086,662
======================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
                                       29
<PAGE>
                      DEL WEBB CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    Years ended June 30, 1998, 1997 and 1996
<TABLE>
<CAPTION>
                                                                               In Thousands
                                                                           Except Per Share Data
-------------------------------------------------------------------------------------------------------
                                                                    1998         1997         1996
-------------------------------------------------------------------------------------------------------
<S>                                                              <C>           <C>          <C>        
Revenues (Note 11)                                               $ 1,177,767   $ 1,186,262  $ 1,050,733
-------------------------------------------------------------------------------------------------------

Costs and expenses (Note 11):
    Home construction, land and other                                898,754       913,872      807,988
    Selling, general and administrative                              166,343       160,924      147,315
    Interest (Note 12)                                                46,212        49,457       42,354
    Loss from impairment of southern California
      real estate inventories (Notes 12 and 13)                            -             -       65,000
-------------------------------------------------------------------------------------------------------
                                                                   1,111,309     1,124,253    1,062,657
-------------------------------------------------------------------------------------------------------
           Earnings (loss) before income taxes and
               extraordinary item                                     66,458        62,009      (11,924)

Income taxes (Note 7)                                                (23,925)      (22,323)       4,173
-------------------------------------------------------------------------------------------------------
           Earnings (loss) before extraordinary item                  42,533        39,686       (7,751)
Extraordinary item:
    Loss from extinguishment of debt (net of $700 tax)                     -         1,285            -
-------------------------------------------------------------------------------------------------------
           Net earnings (loss)                                   $    42,533   $    38,401  $    (7,751)
=======================================================================================================

Weighted average shares outstanding                                   17,829        17,580       17,425
=======================================================================================================
Weighted average shares outstanding - assuming dilution               18,458        17,862       17,425
=======================================================================================================

Earnings (loss) per share:
    Earnings (loss) before extraordinary item                    $      2.39   $      2.26  $     (0.44)
    Extraordinary item                                                     -         (0.07)           -
-------------------------------------------------------------------------------------------------------
    Net earnings (loss)                                          $      2.39   $      2.18  $     (0.44)
=======================================================================================================
Earnings (loss) per share - assuming dilution:
    Earnings (loss) before extraordinary item                    $      2.30   $      2.22  $     (0.44)
    Extraordinary item                                                     -         (0.07)           -
-------------------------------------------------------------------------------------------------------
    Net earnings (loss)                                          $      2.30   $      2.15  $     (0.44)
=======================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
                                       30
<PAGE>
                      DEL WEBB CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                    Years ended June 30, 1998, 1997 and 1996
<TABLE>
<CAPTION>
                                                                             In Thousands                            
--------------------------------------------------------------------------------------------------------------------------
                                                           Additional                                         Total
                                                 Common     Paid-in     Retained  Treasury    Deferred    Shareholders'
                                                 Stock      Capital     Earnings    Stock   Compensation     Equity
------------------------------------------------------------------------------------------------------------------------  
<S>                                             <C>       <C>          <C>        <C>         <C>          <C>         
Balances at July 1, 1995                        $   16    $ 121,059   $ 122,153  $ (11,058)  $ (2,828) $    229,342
                                                                                                       
Shares issued and retired for stock option and                                                         
restricted stock plans (178,463 shares of                                                              
common stock issued, 2,200 shares net                                                                  
increase in treasury stock and 32,512 shares                                                           
of common stock retired), net of amortization        -        2,992           -        (39)    (1,639)        1,314
                                                                                                       
Proceeds from sale of 1,597,172 shares of                                                              
common stock and 877,728 shares of                                                                     
treasury stock, less offering costs of $3.0                                                            
million (Note 8)                                     2       34,211           -     11,058          -        45,271
                                                                                                       
Treasury stock acquired, 1,551 shares                -            -           -        (31)         -           (31)
                                                                                                       
Cash dividends ($ .20 per share)                     -            -      (3,369)         -          -        (3,369)
                                                                                                       
Net loss                                             -            -      (7,751)         -          -        (7,751)
-------------------------------------------------------------------------------------------------------------------
                                                                                                       
Balances at June 30, 1996                           18      158,262     111,033        (70)    (4,467)      264,776
                                                                                                       
Shares issued and retired for stock option and                                                         
restricted stock plans (186,717 shares of                                                              
common stock issued, 16,500 shares net                                                                 
decrease in treasury stock and 37,371 shares                                                           
of common stock retired), net of amortization        -        2,046           -        261        (37)        2,270
                                                                                                       
Treasury stock acquired, 137,258 shares              -            -           -     (2,105)         -        (2,105)
                                                                                                       
Cash dividends ($.20 per share)                      -            -      (3,512)          -         -        (3,512)
                                                                                                       
Net earnings                                         -            -      38,401          -          -        38,401
-------------------------------------------------------------------------------------------------------------------
                                                                                                       
Balances at June 30, 1997                           18      160,308     145,922     (1,914)    (4,504)      299,830
                                                                                                       
Shares issued and retired for stock option                                                             
restricted stock plans (489,756 shares of                                                              
common stock issued, 124,710 net decrease                                                              
in treasury stock and 73,091 shares of                                                                 
common stock retired), net of amortization and       -        6,025           -      1,918       (965)        6,978
                                                                                                       
Shares repurchased (201 shares of treasury                                                             
stock acquired and 177 shares of common                                                                
stock retired)                                       -           (5)          -         (4)         -            (9)
                                                                                                       
Cash dividends ($.20 per share)                      -            -      (3,565)         -          -        (3,565)
                                                                                                       
Net earnings                                         -            -      42,533          -          -        42,533
-------------------------------------------------------------------------------------------------------------------
Balances at June 30, 1998                       $   18    $ 166,328   $ 184,890  $       -   $ (5,469)  $   345,767
===================================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
                                       31
<PAGE>
                      DEL WEBB CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                    Years ended June 30, 1998, 1997 and 1996
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                                        1998         1997         1996
---------------------------------------------------------------------------------------------------------
<S>                                                                  <C>          <C>          <C>       
Cash flows from operating activities:
  Cash received from customers related to community home sales       $  880,670   $  876,379   $  792,835
  Cash received from commercial land and facility sales                  27,787        8,328        7,880
  Cash paid for costs related to community home construction           (545,137)    (579,188)    (509,315)
---------------------------------------------------------------------------------------------------------
    Net cash provided by community sales activities                     363,320      305,519      291,400
  Cash paid for land acquisitions at operating communities              (14,958)     (11,885)      (8,351)
  Cash paid for lot development at operating communities               (108,927)    (100,588)     (96,863)
  Cash paid for amenity development at operating communities            (45,776)     (56,503)     (63,853)
---------------------------------------------------------------------------------------------------------
    Net cash provided by operating communities                          193,659      136,543      122,333
  Cash paid for costs related to communities in the pre-operating
      stage                                                            (162,910)     (81,755)     (92,668)
  Cash received from customers related to conventional
      homebuilding                                                      245,758      248,488      222,513
  Cash paid for land, development, construction and other costs
      related to conventional homebuilding                             (224,345)    (229,830)    (213,959)
  Cash received from residential land development project                 5,195        7,110        8,834
  Cash paid for corporate activities                                    (59,871)     (42,327)     (34,280)
  Interest paid                                                         (53,118)     (45,854)     (47,444)
  Cash paid for income taxes                                            (14,930)     (14,879)     (10,501)
---------------------------------------------------------------------------------------------------------
    Net cash used for operating activities                              (70,562)     (22,504)     (45,172)
---------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
  Purchases of property and equipment                                   (16,855)      (4,284)      (6,715)
  Investments in life insurance policies                                 (4,568)      (3,222)      (3,554)
---------------------------------------------------------------------------------------------------------
    Net cash used for investing activities                              (21,423)      (7,506)     (10,269)
---------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
  Borrowings                                                            592,611      547,871      305,122
  Repayments of debt                                                   (513,531)    (506,990)    (292,260)
  Proceeds from sale of common stock                                          -            -       45,271
  Stock purchases                                                            (9)      (2,105)         (31)
  Proceeds from exercise of common stock options                          6,126        1,121          148
  Dividends paid                                                         (3,565)      (3,512)      (3,369)
---------------------------------------------------------------------------------------------------------
    Net cash provided by financing activities                            81,632       36,385       54,881
---------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and short-term investments              (10,353)       6,375         (560)
Cash and short-term investments at beginning of year                     24,715       18,340       18,900
---------------------------------------------------------------------------------------------------------
Cash and short-term investments at end of year                       $   14,362   $   24,715   $   18,340
=========================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
                                       32
<PAGE>
                      DEL WEBB CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                    Years ended June 30, 1998, 1997 and 1996
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                          1998         1997       1996
--------------------------------------------------------------------------------------------------------
<S>                                                                     <C>         <C>        <C>       
Reconciliation of net earnings (loss) to net cash used for operating
activities:
   Net earnings (loss)                                                  $   42,533  $  38,401  $  (7,751)
   Allocation of non-cash common costs in costs and expenses,
      excluding interest                                                   273,173    268,806    247,734
   Amortization of capitalized interest in costs and expenses               46,212     49,457     42,354
   Deferred compensation amortization                                        1,838      1,748      1,804
   Depreciation and other amortization                                       6,725      6,425      8,740
   Deferred income taxes on earnings (loss) before extraordinary item       10,771      6,086    (17,810)
   Non-cash loss from impairment of southern California real estate
      inventories                                                                -          -     65,000
   Extraordinary loss from extinguishment of debt (net of tax)                   -      1,285          -
   Net increase in home construction costs                                    (152)    (4,218)   (35,445)
   Land acquisitions                                                       (69,482)   (61,499)   (37,176)
   Lot development                                                        (204,080)  (155,348)  (190,959)
   Amenity development                                                     (99,280)   (89,063)  (103,086)
   Pre-acquisition costs                                                   (13,776)   (19,869)    (8,732)
   Net change in other assets and liabilities                              (65,044)   (64,715)    (9,845)
--------------------------------------------------------------------------------------------------------
      Net cash used for operating activities                            $  (70,562) $ (22,504) $ (45,172)
========================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
                                       33
<PAGE>
                      DEL WEBB CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          June 30, 1998, 1997 and 1996


(1)      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Principles of Consolidation
         ---------------------------

         The consolidated  financial statements include the accounts of Del Webb
         Corporation  and its  subsidiaries  (the  "Company").  All  significant
         intercompany   transactions   and  accounts  have  been  eliminated  in
         consolidation.

         Operations
         ----------

         The   Company   develops    residential    communities   ranging   from
         smaller-scale,   non-amenitized  communities  within  its  conventional
         homebuilding operations to large-scale, master-planned communities with
         extensive  amenities.  The Company designs,  develops and markets these
         communities,  controlling  all  phases of the master  plan  development
         process from land selection through the construction and sale of homes.
         Within its communities, the Company is usually the exclusive builder of
         homes.  The  Company  currently  conducts  its  operations  in Arizona,
         California, Florida, Illinois, Nevada, South Carolina and Texas.

         The  Company's  operations  are  subject  to  a  number  of  risks  and
         uncertainties,  including,  but not limited to, risks  associated  with
         financing and leverage,  the development of future communities (and new
         geographic markets), governmental regulation,  including land exchanges
         with governmental entities, environmental considerations,  competition,
         the geographic concentration of the Company's operations,  the cyclical
         nature  of real  estate  operations  and  other  conditions  generally,
         fluctuations  in labor and material  costs and natural risks that exist
         in certain of the Company's market areas.

         Real Estate Inventories
         -----------------------

         Real estate inventories  include  undeveloped land,  partially improved
         land,  amenities  and homes on  finished  lots,  in  various  stages of
         completion.  These assets include direct  construction  costs for homes
         and common costs.  Common costs include land,  general and  subdivision
         land  development  costs,  model and  vacation  home costs in excess of
         normal direct  construction  costs,  costs of community  sales centers,
         costs  of  assets  (such  as  golf  courses  and  recreation   centers)
         contributed  to  certain  of  the  community  associations,   costs  of
         subsidizing the community associations, development period interest and
         other costs,  all of which are capitalized.  The capitalized  costs and
         estimated  future  common  costs  are  allocated,  on  a  community  by
         community  basis,  to residential  and  commercial  lots based upon the
         estimated  relative  sales  value  that  each lot has to the  estimated
         aggregate sales value of all lots in the community.  Home construction,
         land and other  costs and  expenses  includes  the direct  construction
         costs of the home and an allocation of common costs. Sales commissions,
         advertising  and other  marketing  expenses  are  included  in selling,
         general and administrative  expenses. The Company recognizes revenue at
         close of escrow.

         The Company values its real estate inventories to be developed or under
         development  in  accordance  with  Statement  of  Financial  Accounting
         Standards ("SFAS") No. 121, Accounting for the Impairment of Long-Lived
         Assets and for  Long-Lived  Assets to Be Disposed Of, which the Company
         adopted in fiscal 1996. The Company has no  significant  completed real
         estate assets.
                                       34
<PAGE>
(1)      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         SFAS No. 121 requires that  long-lived  assets to be developed or under
         development,   such  as  real  estate  inventories,   be  reviewed  for
         impairment  whenever events or changes in  circumstances  indicate that
         the book value of the asset may not be  recoverable.  If the sum of the
         expected  future  net cash flows  (undiscounted  and  without  interest
         charges)  from an asset to be held and used is less than the book value
         of the asset,  an  impairment  loss must be recognized in the amount of
         the  difference  between the book value and fair value.  For  long-term
         assets like active  adult  communities,  the  determination  of whether
         there is an  impairment  loss is dependent  primarily on the  Company's
         estimate of annual home closings over the life of the community,  which
         involves numerous assumptions and judgements as to future events over a
         period of many years.  In connection  with its adoption of SFAS No. 121
         in fiscal 1996, the Company incurred a non-cash loss from impairment of
         southern  California  real  estate  inventories  in the amount of $65.0
         million  pre-tax  ($42.3 million after tax) related to the valuation of
         its Sun City Palm Desert active adult community (see Note 13).

         Cash and Short-Term Investments
         -------------------------------

         The   Company's   policy   is  to  invest   its  cash  in   high-grade,
         income-producing short-term investments.  Accordingly,  uninvested cash
         balances are generally kept at minimum levels.  Short-term  investments
         are  valued  at the  lower of cost or market  and  principally  include
         overnight repurchase agreements, certificates of deposit and commercial
         paper with an original maturity of less than 90 days.

         Depreciation
         ------------

         Depreciation is computed using principally the straight-line method for
         financial  statement purposes and accelerated methods for tax purposes,
         over the estimated useful lives of the assets.

         Income Taxes
         ------------

         The Company  accounts  for income  taxes using the asset and  liability
         method.  Deferred tax assets and  liabilities  are  recognized  for the
         future  tax  consequences   attributable  to  differences  between  the
         financial statement carrying amounts of existing assets and liabilities
         and their respective tax bases. Deferred tax assets and liabilities are
         measured using enacted tax rates expected to apply to taxable income in
         future years in which those  temporary  differences  are expected to be
         recovered or settled. The effect on deferred tax assets and liabilities
         of a change in tax rates is recognized in the consolidated statement of
         operations as an  adjustment  to the  effective  income tax rate in the
         period that includes the enactment date.

         Earnings (Loss) Per Share
         -------------------------

         The Company  adopted SFAS No. 128,  Earnings Per Share,  during  fiscal
         1998.  The Company's  earnings  (loss) per share for prior periods have
         been restated to conform with the provisions of SFAS No. 128.

         Earnings (loss) per share is determined by dividing net earnings (loss)
         by the weighted average number of common shares  outstanding during the
         year.  Earnings per share - assuming dilution is determined by dividing
         net  earnings  by the  weighted  average  number of common  and  common
         equivalent   shares  (which   reflect  the  effect  of  stock  options)
         outstanding  during the year. In calculating loss per share, the effect
         of  stock  options  is  excluded   because  their  inclusion  would  be
         anti-dilutive.

         Consolidated Statements of Cash Flows
         -------------------------------------

         In the  Consolidated  Statements  of Cash Flows,  the  Company  defines
         operating  communities  as  communities  generating  revenues from home
         closings.  Communities  in the  pre-operating  stage  are those not yet
         generating revenues from home closings.

         Warranty Costs
         --------------

         Estimated future warranty costs are charged to home construction,  land
         and other costs and expenses  when the revenues  from home closings are
         recognized.
                                       35
<PAGE>
(1)      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Goodwill
         --------

         Goodwill is included in other  assets and  represents  the  unamortized
         excess  of the  purchase  price  of two  age-qualified  communities  in
         central  Florida over the fair value of net assets  acquired in January
         1998 (see Note 5). This goodwill is being  amortized on a straight-line
         basis over a period of 15 years.

         Financial Instruments
         ---------------------

         In the normal  course of  business,  the  Company may invest in various
         financial assets and incurs various financial liabilities.  The Company
         does  not  trade  in  derivative  financial  instruments,  although  it
         occasionally  enters into  agreements  involving  derivative  financial
         instruments  for  purposes  other than  trading.  At June 30,  1998 the
         Company had no significant derivative financial instruments.

         The fair value estimates of financial  instruments  presented in Note 6
         have been determined by the Company using available market  information
         and  valuation   methodologies   deemed  appropriate  by  the  Company.
         Considerable  judgement  is  required  in  interpreting  market data to
         develop  the  estimates  of fair value.  Accordingly,  these fair value
         estimates  are not  necessarily  indicative  of the amounts the Company
         might pay or receive in actual market transactions. Potential taxes and
         other  transaction  costs have not been  considered in estimating  fair
         value.

         The fair values of the Company's publicly held debt are estimated based
         on the quoted bid prices for these debt  instruments  on June 30, 1998.
         The carrying  amounts of the Company's  remaining debt  approximate the
         estimated fair values because they are at interest rates  comparable to
         rates  currently  available to the Company for debt with similar  terms
         and remaining  maturities.  For all other  financial  instruments,  the
         carrying  amounts  approximate  the fair  values  because  of the short
         maturity  of these  instruments  and in some  cases  because  they bear
         interest at market rates. As substantially  all of the Company's assets
         (including real estate inventories, property and equipment and deferred
         income taxes) are not financial instruments,  the disclosures in Note 6
         do not reflect the value of the Company as a whole.

         Stock-Based Compensation
         ------------------------

         In  accordance  with the  provisions  of  Accounting  Principals  Board
         Opinion No. 25,  Accounting for Stock Issued to Employees,  the Company
         measures  stock-based  compensation expense as the excess of the market
         price at the grant date over the amount the  employee  must pay for the
         stock. The Company's policy is to generally grant stock options at fair
         market  value at the  date of  grant,  so no  compensation  expense  is
         recognized.  As  permitted,  the  Company has elected to adopt only the
         disclosure  provisions  of SFAS No.  123,  Accounting  for  Stock-Based
         Compensation (see Note 9).

         Use of Estimates
         ----------------

         The preparation of the Company's  consolidated  financial statements in
         conformity  with  generally  accepted  accounting  principles  requires
         management  to  make  estimates  and  assumptions,  particularly  those
         previously  discussed  for real  estate  inventories,  that  affect the
         amounts   reported  in  the  consolidated   financial   statements  and
         accompanying  notes.  Actual results could differ materially from those
         estimates.
                                       36
<PAGE>
(2)      REAL ESTATE INVENTORIES

         The components of real estate inventories are as follows:
<TABLE>
<CAPTION>
                                                                                     In Thousands
                                                                                      at June 30,
------------------------------------------------------------------------------------------------------
                                                                               1998          1997
------------------------------------------------------------------------------------------------------
<S>                                                                         <C>            <C>        
Home construction costs                                                     $    182,170   $   182,018
Unamortized improvement and amenity costs                                        603,390       489,142
Unamortized capitalized interest                                                  61,455        46,121
Land held for housing                                                            220,441       174,930
Land and facilities held for future development or sale                           45,841        47,473
------------------------------------------------------------------------------------------------------
                                                                            $  1,113,297   $   939,684
======================================================================================================
</TABLE>

         At June 30,  1998,  the Company had 436  completed  homes and 395 homes
         under  construction  that were not subject to a sales  contract.  These
         homes represented $44.5 million of home construction  costs at June 30,
         1998.  At June 30,  1997 the Company  had 403  completed  homes and 516
         homes  under   construction   (representing   $48.6   million  of  home
         construction costs) that were not subject to a sales contract.

         Included in land and facilities held for future  development or sale at
         June 30, 1998 were 481 acres of residential  land,  commercial land and
         worship  sites  that  are  currently  being  marketed  for  sale at the
         Company's communities and conventional homebuilding operations.

         During  fiscal 1998 the Company  acquired the initial  portions of land
         for (i) a planned  active  adult  community in the Chicago area town of
         Huntley,  Illinois, (ii) a planned large-scale master-planned community
         in the  southern  Las Vegas  valley and (iii) a planned  smaller-scale,
         less-amenitized   community   in  northern   California.   Accordingly,
         capitalized pre-acquisition costs previously classified as other assets
         for  these  communities  are now  classified  as  part  of real  estate
         inventories.

         In January 1998 the Company acquired certain assets and assumed certain
         liabilities  at two  operating  age-qualified  communities  in  central
         Florida for a total purchase price of approximately $45 million. 

(3)      RECEIVABLES

Receivables are summarized as follows:

                                                               In Thousands
                                                                at June 30,
--------------------------------------------------------------------------------
                                                              1998       1997
--------------------------------------------------------------------------------
Escrow funds from home and land sales                     $   12,853  $    8,254
Mortgage loans held for sale                                  15,020       8,629
Notes from sales of land and facilities                        8,090       8,424
Other                                                          5,535       3,585
--------------------------------------------------------------------------------
                                                          $   41,498  $   28,892
================================================================================
                                       37
<PAGE>
(4)      PROPERTY AND EQUIPMENT, NET

Property and equipment, stated at cost, and related accumulated depreciation are
summarized as follows:

                                                            In Thousands
                                                             at June 30,
--------------------------------------------------------------------------------
                                                          1998         1997
--------------------------------------------------------------------------------
Buildings and improvements                            $     11,186  $      6,803
Equipment                                                   43,556        40,240
Land and improvements                                        7,965             -
--------------------------------------------------------------------------------
                                                            62,707        47,043
Less accumulated depreciation                               29,374        26,106
--------------------------------------------------------------------------------
                                                      $     33,333  $     20,937
================================================================================


(5)      OTHER ASSETS

Other assets are summarized as follows:

                                                              In Thousands
                                                               at June 30,
--------------------------------------------------------------------------------
                                                           1998         1997
--------------------------------------------------------------------------------
Pre-acquisition costs                                   $    51,655   $   30,876
Cash surrender value of life insurance policies              24,260       20,083
Goodwill                                                      9,694            -
Utility costs and deposits                                    9,118        4,971
Prepaid expenses                                              6,373        5,903
Water right costs                                             3,263            -
Other                                                         3,609        4,075
--------------------------------------------------------------------------------
                                                        $   107,972   $   65,908
================================================================================


Substantially  all of  pre-acquisition  costs at June 30, 1998 consists of costs
incurred for the  acquisition  of an  environmentally-sensitive  property by the
Company for the purpose of exchanging the property with the United States Bureau
of Land  Management  for  property  in the Las Vegas area to be  included in the
Company's Anthem Las Vegas Project,  substantially all of which would be for Sun
City  Anthem.  Any  exchange  is  subject  to  regulatory  approvals  and  other
conditions.  If an exchange is effected,  these costs will be reclassified to be
part of real estate inventories.

Cash surrender values of life insurance  policies relate to policies acquired in
connection with certain executive benefit plans.
                                       38
<PAGE>
(6)      NOTES PAYABLE, SENIOR AND SUBORDINATED DEBT

         Notes payable, senior and subordinated debt consists of the following:
<TABLE>
<CAPTION>
                                                                                 In Thousands
                                                                                  at June 30,
-------------------------------------------------------------------------------------------------------
                                                                               1998           1997
-------------------------------------------------------------------------------------------------------
<S>                                                                        <C>            <C>          
9 3/4% Senior Subordinated Debentures due 2003, net                        $      98,081  $      97,670
9% Senior Subordinated Debentures due 2006, net                                   97,902         97,628
9 3/4% Senior Subordinated Debentures due 2008, net                              145,370        144,889
9 3/8% Senior Subordinated Debentures due 2009, net                              194,977              -

Notes payable to banks under a revolving credit facility
    and short-term lines of credit                                               111,209        185,990

Real estate and other notes, variable interest rates from
    prime to prime plus 1% and fixed rates from 7.0%
    to 10.2%, maturities to 2005                                                  56,399         36,891
-------------------------------------------------------------------------------------------------------
                                                                           $     703,938  $     563,068
=======================================================================================================
</TABLE>

In March 1993 the Company  completed a public offering of $100 million of Senior
Subordinated  Debentures,  which are shown net of unamortized deferred financing
costs and discount.  These Debentures are due on March 1, 2003 and have a stated
interest rate of 9 3/4 percent per year.  Interest is payable  semi-annually  on
March 1 and September 1. The annual  effective  interest rate of the Debentures,
after  giving  effect  to the  amortization  of  deferred  financing  costs  and
discount,  is 10.2 percent.  The Debentures may be redeemed by the Company on or
after  March 1,  1998,  1999  and 2000 at  104.875,  102.4375  and 100  percent,
respectively,  of the principal amount of the Debentures redeemed,  plus accrued
and unpaid interest to the redemption date.

In February  1994 the Company  completed  a public  offering of $100  million of
Senior  Subordinated  Debentures,  which are shown net of  unamortized  deferred
financing costs. These Debentures are due on February 15, 2006 and have a stated
interest  rate of 9 percent  per year.  Interest  is  payable  semi-annually  on
February 15 and August 15. The annual effective interest rate of the Debentures,
after giving effect to the  amortization  of deferred  financing  costs,  is 9.3
percent.  The Debentures may be redeemed by the Company on or after February 15,
1999, 2000, 2001, 2002 and 2003 at 104.500,  103.375,  102.250,  101.125 and 100
percent,  respectively, of the principal amount of the Debentures redeemed, plus
accrued and unpaid interest to the redemption date.

In January  1997 the  Company  completed a public  offering  of $150  million of
Senior  Subordinated  Debentures,  which are shown net of  unamortized  deferred
financing costs and discount.  These  Debentures are due on January 15, 2008 and
have a stated  interest  rate of 9 3/4  percent  per year.  Interest  is payable
semi-annually on January 15 and July 15. The annual  effective  interest rate of
the Debentures,  after giving effect to the  amortization of deferred  financing
costs and  discount,  is 10.1  percent.  The  Debentures  may be redeemed by the
Company on or after January 15, 2002,  2003, 2004 and 2005 at 104.875,  103.250,
101.625 and 100 percent, respectively, of the principal amount of the Debentures
redeemed, plus accrued and unpaid interest to the redemption date.

In May 1998 the Company  completed a public  offering of $200  million of Senior
Subordinated  Debentures,  which are shown net of unamortized deferred financing
costs.  These  Debentures are due on May 1, 2009 and have a stated interest rate
of 9 3/8  percent per  year.  Interest  is  payable  semi-annually  on May 1 and
November 1. The annual effective  interest rate of the Debentures,  after giving
effect to the  amortization of deferred  financing  costs,  is 9.6 percent.  The
Debentures  may be redeemed by the Company on or after May 1, 2003,  2004,  2005
and 2006 at 104.688,  103.125,  101.563 and 100  percent,  respectively,  of the
principal amount of the Debentures redeemed, plus accrued and unpaid interest to
the redemption date.
                                       39
<PAGE>
(6)      NOTES PAYABLE, SENIOR AND SUBORDINATED DEBT (Continued)

The  Company has a $450  million  senior  unsecured  revolving  credit  facility
(increased  from $350 million in January 1998 and $400 million in June 1998). If
the revolving credit facility is not subsequently amended, it will mature in May
2002.  Borrowings under this facility bear interest at the prime rate or, if the
Company selects,  at the London interbank offered rate plus 1.30 to 1.90 percent
(depending  on the  Company's  ratio of debt to tangible  worth).  The effective
interest rate on borrowings  outstanding  under the senior  unsecured  revolving
credit  facility  at June 30,  1998 and 1997 was 8.5  percent  and 7.9  percent,
respectively.

The senior  unsecured  revolving  credit  facility  and the  indentures  for the
Company's  publicly-held  debt contain covenants which, taken together and among
other  things,   limit   investments  in  unentitled   land  and  unsold  homes,
conventional  homebuilding assets, dividends,  stock repurchases,  incurrence of
indebtedness  and  certain  acquisitions  and  which  could,  depending  on  the
circumstances, affect the Company's ability to borrow in the future.

At June 30,  1998 the  Company  had  $96.0  million  outstanding  under its $450
million senior unsecured revolving credit facility and $15.2 million outstanding
under its $25 million of short-term lines of credit.

At June 30, 1998,  under the most  restrictive of the covenants in the Company's
debt agreements,  $34.6 million of the Company's retained earnings was available
for  payment of cash  dividends  or for the  acquisition  by the  Company of its
common stock.

The  estimated  fair  values at June 30,  1998 of the  Company's  9 3/4%  Senior
Subordinated  Debentures due 2003, 9% Senior Subordinated Debentures due 2006, 9
3/4%  Senior  Subordinated  Debentures  due 2008 and 9 3/8% Senior  Subordinated
Debentures  due 2009 were $103.1  million,  $99.5  million,  $150.9  million and
$196.8 million,  respectively. The estimated fair values at June 30, 1997 of the
Company's 9 3/4% Senior Subordinated Debentures due 2003, 9% Senior Subordinated
Debentures  due 2006 and 9 3/4%  Senior  Subordinated  Debentures  due 2008 were
$98.8 million, $102.9 million and $154.5 million, respectively.

The  principal  payment  requirements  (in  thousands) on debt for the next five
years ended June 30 are as follows:


                            1999         $   46,054
                            2000         $    2,934
                            2001         $    2,450
                            2002         $   99,286
                            2003         $  108,407
      
                                       40
<PAGE>
(7)      INCOME TAXES

The components of income taxes on earnings before the extraordinary item are:


                                                        In Thousands
                                                    Year Ended June 30,
--------------------------------------------------------------------------------
                                              1998         1997        1996
--------------------------------------------------------------------------------
Current:
  Federal                                   $  12,252   $   14,029   $   11,333
  State                                           902        2,208        2,304
--------------------------------------------------------------------------------
                                               13,154       16,237       13,637
--------------------------------------------------------------------------------
Deferred:
  Federal                                       9,730        6,854      (15,084)
  State                                         1,041         (768)      (2,726)
--------------------------------------------------------------------------------
                                               10,771        6,086      (17,810)
--------------------------------------------------------------------------------
                                            $  23,925   $   22,323   $   (4,173)
================================================================================

In the year ended June 30,  1997,  the Company  also  recognized  a $0.7 million
income tax benefit  related to the  extraordinary  loss from  extinguishment  of
debt.

The components of deferred income taxes are as follows:

<TABLE>
<CAPTION>
                                                                          In Thousands
                                                                       Year Ended June 30,
------------------------------------------------------------------------------------------------------
                                                               1998            1997           1996
------------------------------------------------------------------------------------------------------
<S>                                                         <C>             <C>            <C>         
Change in net operating loss carryforwards                  $      (441)    $     (451)    $      (201)
Change in loss provisions for discontinued                                                
  operations                                                        968          2,982           1,854
Change in basis differences of real estate                        6,019          2,802         (18,214)
Deferred compensation                                               117         (1,422)         (1,087)
Amortization of short period loss                                     -              -             486
Accelerated depreciation                                          2,357          2,094           4,245
Change in tax credit carryforwards                                 (621)         3,051               -
Change in deferred tax asset valuation allowance                      -           (473)              -
Other                                                             2,372         (2,497)         (4,893)
------------------------------------------------------------------------------------------------------
                                                            $    10,771     $    6,086     $   (17,810)
======================================================================================================
</TABLE>

The deferred  income tax benefit for fiscal 1996,  and the related  deferred tax
asset at June 30, 1996,  resulted  from the  non-cash  loss from  impairment  of
southern California real estate inventories  recognized by the Company in fiscal
1996 (see Note 13).

The 1997 reduction in the deferred tax asset valuation  allowance  resulted from
additional years of operating earnings generated by the Company, which increased
the portion of the gross deferred tax asset that the Company believed would more
likely than not be realized.
                                       41
<PAGE>
(7)      INCOME TAXES (Continued)


Deferred tax assets and  liabilities  have been  recognized in the  consolidated
balance sheets due to temporary differences and carryforwards as follows:

<TABLE>
<CAPTION>
                                                                    In Thousands
                                                                     at June 30,
------------------------------------------------------------------------------------
                                                               1998            1997
------------------------------------------------------------------------------------
<S>                                                        <C>                <C>         
Deferred tax assets:
   Net operating loss carryforwards                        $    1,093      $     652
   Tax credit carryforwards                                       621              -
   Liabilities of discontinued operations,
     principally due to loss provisions                         3,629          4,597
   Property and equipment, principally due
     to differences in depreciation                             2,773          5,130
   State income taxes                                           1,709          2,586
   Deferred compensation                                        6,679          6,796
   Accruals                                                    10,225         11,630
   Other                                                        2,110          1,141
------------------------------------------------------------------------------------
                                                               28,839         32,532
   Valuation allowance                                          3,389          3,389
------------------------------------------------------------------------------------
                                                               25,450         29,143
------------------------------------------------------------------------------------
Deferred tax liabilities:
   Real estate, principally due to basis differences           27,106         21,087
   Other                                                        2,589          1,530
------------------------------------------------------------------------------------
                                                               29,695         22,617
------------------------------------------------------------------------------------
              Net deferred income taxes                    $   (4,245)     $   6,526
====================================================================================
</TABLE>

Income taxes differ from the amounts computed using the federal statutory income
tax rate as a result of the following:

<TABLE>
<CAPTION>
                                                                           In Thousands
                                                                        Year Ended June 30,
------------------------------------------------------------------------------------------------------
                                                               1998           1997           1996
------------------------------------------------------------------------------------------------------
<S>                                                         <C>            <C>            <C>        
Expected taxes at current federal statutory
    income tax rate                                         $    23,260    $    21,703    $    (4,173)
State income taxes, net of federal benefit                        2,438          2,856           (274)
Federal and state tax credits                                    (1,798)        (2,210)        (2,580)
Adjustments due to the settlement of audits and
   resolution of issues                                            (351)           252          2,407
Change in deferred tax asset valuation allowance                      -           (473)             -
Other                                                               376            195            447
------------------------------------------------------------------------------------------------------
              Income taxes                                  $    23,925    $    22,323    $    (4,173)
======================================================================================================
</TABLE>

At June 30, 1998 the  Company had a state net  operating  loss  carryforward  of
$21.9 million that expires in fiscal 2018.
                                       42
<PAGE>
(8)      EQUITY TRANSACTION

In August 1995 the Company  publicly sold 2,474,900  shares of its common stock.
The net  proceeds  of  $45.3  million  were  used  to  repay  a  portion  of the
indebtedness  then outstanding  under the Company's  senior unsecured  revolving
credit facility.

(9)      COMMON STOCK RESERVED

The Company has five stock option plans: the 1981 Stock Option Plan (under which
no grants can be made  subsequent to December 31,  1991),  the 1986 Stock Option
and Stock  Appreciation  Rights  (SAR) Plan  (under  which no grants can be made
subsequent to December 31, 1995) and the 1991, 1993 and 1995 Executive Long-Term
Incentive Plans (1991 ELTIP, 1993 ELTIP and 1995 ELTIP, which cover both options
and restricted  stock grants).  Options under each of these plans are granted to
key employees to purchase  shares of the  Company's  common stock at a price not
less than the  current  market  price at the date of the grant.  The options are
exercisable over a ten-year period from the date of the grant. Shares authorized
for grant under the 1991 ELTIP total 750,000.  Shares authorized for grant under
the 1993 ELTIP total  1,200,000,  of which no more than  450,000 may be used for
restricted stock grants.  Shares authorized for grant under the 1995 ELTIP total
1,200,000,  of which no more  than  100,000  may be used  for  restricted  stock
grants.

The Company has the 1991 Directors' Stock Plan and the 1995 Director Stock Plan,
under which  options may be granted to the  Directors of the Company to purchase
shares of the Company's common stock at a price not less than the current market
price at the date of grant.  Under these plans the  Directors may elect to defer
some or all of their  annual  retainers  and receive  restricted  stock or stock
options at prices that,  when combined  with the amounts of deferred  retainers,
equal the current market price at the date of the grant. Shares authorized under
these plans total 75,000 per plan.

Effective in fiscal 1997 the Company adopted the disclosure requirements of SFAS
No. 123,  Accounting for Stock-Based  Compensation.  As permitted under SFAS No.
123, the Company will continue to measure  stock-based  compensation  expense as
the  excess of the market  price at the grant date over the amount the  employee
must pay for the stock.

SFAS No. 123  requires  disclosure  of pro forma net  earnings and pro forma net
earnings  per  share as if the fair  value  based  method  had been  applied  in
measuring compensation expense for awards granted in fiscal 1998, 1997 and 1996.
Management  believes  that the fiscal 1998,  1997 and 1996 pro forma amounts may
not be representative  of the effects of stock-based  awards on future pro forma
net earnings and pro forma net earnings per share because,  among other reasons,
those pro forma amounts  exclude the pro forma  compensation  expense related to
unvested stock options granted before fiscal 1996.
                                       43
<PAGE>
(9)      COMMON STOCK RESERVED (CONTINUED)

Reported  and pro forma net  earnings  (loss),  in  thousands,  and net earnings
(loss) per share  amounts for the years ended June 30,  1998,  1997 and 1996 are
set forth below:

<TABLE>
<CAPTION>
                                                                  1998           1997          1996
-------------------------------------------------------------------------------------------------------
<S>                                                            <C>            <C>           <C>        
Reported:
   Net earnings (loss)                                         $   42,533     $   38,401    $   (7,751)
   Net earnings (loss) per share                                     2.39           2.18         (0.44)
   Net earnings (loss) per share - assuming dilution                 2.30           2.15         (0.44)

Pro forma:
   Net earnings (loss)                                             41,588         37,777        (8,056)
   Net earnings (loss) per share                                     2.33           2.15         (0.46)
   Net earnings (loss) per share - assuming dilution                 2.25           2.11         (0.46)
-------------------------------------------------------------------------------------------------------
</TABLE>

The fair values of the options granted were estimated on the date of their grant
using the  Black-Scholes  option  pricing model based on the following  weighted
average assumptions:

<TABLE>
<CAPTION>
                                                           1998             1997              1996
------------------------------------------------------------------------------------------------------
<S>                                                        <C>               <C>              <C>  
Risk free interest rate                                    5.65%             6.26%            5.84%
Expected life (in years)                                    7.5               7.4              7.4
Expected volatility                                         29%               27%              32%
Expected dividend yield                                    1.08%             1.17%            1.16%
------------------------------------------------------------------------------------------------------
</TABLE>

Stock  option  activity  for the years  ended  June 30,  1998,  1997 and 1996 is
summarized as follows:

<TABLE>
<CAPTION>
                                      1998                      1997                      1996
                           ----------------------------------------------------------------------------
                                            Weighted                 Weighted                  Weighted
                                            Average                  Average                    Average
                                            Exercise                 Exercise                  Exercise
                               Options       Price     Options        Price      Options         Price
-------------------------------------------------------------------------------------------------------
<S>                           <C>           <C>        <C>          <C>         <C>          <C>       
Options outstanding,
   beginning of year          1,981,613     $  15.12   1,801,288    $   14.82   1,438,470    $    13.19
     Granted                    372,750        20.97     339,665        16.39     388,201         20.83
     Exercised                 (460,506)       13.30     (94,017)       11.93     (12,883)        11.52
     Canceled                   (86,225)       19.06     (65,323)       17.89     (12,500)        17.68
-------------------------------------------------------------------------------------------------------
Options outstanding,
    end of year               1,807,632     $  16.61   1,981,613    $   15.12   1,801,288    $    14.82
=======================================================================================================

Options exercisable
   at end of year             1,050,291     $  14.47   1,287,530    $   13.49   1,145,236    $    12.70
=======================================================================================================

Weighted average fair
   value of options granted
   during the year                $8.32                $    6.46                $    8.73
=======================================================================================================
</TABLE>
                                       44
<PAGE>
(9)      COMMON STOCK RESERVED (Continued)

Stock options outstanding at June 30, 1998 were as follows:

<TABLE>
<CAPTION>
                                  Options Outstanding                         Options Exercisable
------------------------------------------------------------------------------------------------------
      Range of                      Weighted Average       Weighted                       Weighted
   Exercise Price     Options    Remaining Contractual      Average       Options          Average
                                          Life          Exercise Price                 Exercise Price
------------------------------------------------------------------------------------------------------
<S>                 <C>                <C>               <C>            <C>              <C>       
  $ 8.00 - $ 9.89        144,319       2.6 years         $     8.65          144,319     $     8.65
  $10.13 - $14.75        431,636       3.5                    13.04          431,636          13.04
  $15.71 - $17.69        580,337       6.9                    16.38          351,025          16.38
  $20.56 - $25.09        651,340       8.4                    20.93          123,311          20.85
                    -------------                                       ------------
                       1,807,632       6.3 years         $    16.61        1,050,291     $    14.47
======================================================================================================
</TABLE>

Shares granted, net of cancellations, under the Company's restricted stock plans
during the years ended June 30, 1998, 1997 and 1996  aggregated  128,070 shares,
109,200  shares  and  163,380  shares,  respectively.   The  Company  recognized
compensation  expense of $1.8 million,  $1.7 million and $1.8 million related to
shares  granted  under the  restricted  stock plans for the years ended June 30,
1998, 1997 and 1996, respectively.

(10)     DEFINED CONTRIBUTION PLAN

The Company sponsors a defined contribution  retirement savings plan that covers
substantially  all  employees of the Company  after  completion of six months of
service.  Company contributions to this plan, which can include amounts based on
a percentage of employee  contributions as well as discretionary  contributions,
were $1.7  million,  $2.6  million and $2.0 million for the years ended June 30,
1998, 1997 and 1996, respectively.

                                       45
<PAGE>
(11)     REVENUES AND COSTS AND EXPENSES

The components of revenues and costs and expenses:
<TABLE>
<CAPTION>
                                                                           In Thousands
                                                                      Year Ended June 30,
-------------------------------------------------------------------------------------------------------
                                                              1998            1997            1996
-------------------------------------------------------------------------------------------------------
<S>                                                      <C>             <C>             <C>           
Revenues:
   Homebuilding:
        Communities                                      $      879,825  $      906,523  $      794,671
        Conventional                                            238,559         237,566         217,158
-------------------------------------------------------------------------------------------------------
            Total  homebuilding                               1,118,384       1,144,089       1,011,829
   Land and facility sales                                       48,522          31,289          29,525
   Other                                                         10,861          10,884           9,379
-------------------------------------------------------------------------------------------------------
                                                         $    1,177,767  $    1,186,262  $    1,050,733
=======================================================================================================

Costs and expenses:
   Home construction and land:
        Communities                                      $      661,534  $      682,873  $      597,014
        Conventional                                            200,159         202,054         184,532
-------------------------------------------------------------------------------------------------------
             Total homebuilding                                 861,693         884,927         781,546
   Cost of land and facility sales                               33,479          26,051          23,227
   Other cost of sales                                            3,582           2,894           3,215
-------------------------------------------------------------------------------------------------------
            Total home construction, land and other             898,754         913,872         807,988
   Selling, general and administrative                          166,343         160,924         147,315
   Interest                                                      46,212          49,457          42,354
   Loss from impairment of southern California real
      estate inventories                                              -               -          65,000
-------------------------------------------------------------------------------------------------------
                                                         $    1,111,309  $    1,124,253  $    1,062,657
=======================================================================================================
</TABLE>

(12)     INTEREST

The following table shows the components of interest:

<TABLE>
<CAPTION>
                                                                          In Thousands
                                                                       Year Ended June 30,
------------------------------------------------------------------------------------------------------
                                                               1998           1997           1996
------------------------------------------------------------------------------------------------------
<S>                                                         <C>            <C>            <C>         
Interest incurred and capitalized                           $     61,546   $     51,917   $     52,022
======================================================================================================
Amortization of capitalized interest in costs and                                         
   expenses                                                 $     46,212   $     49,457   $     42,354
======================================================================================================
Unamortized capitalized interest included in real                                         
   estate inventories at year end                           $     61,455   $     46,121   $     43,661
======================================================================================================
Interest income                                             $      1,072   $      1,510   $      1,017
======================================================================================================
</TABLE>

Unamortized capitalized interest included in real estate inventories at June 30,
1996 was  reduced  by $21.8  million,  the  portion  of the  non-cash  loss from
impairment  of  southern   California  real  estate  inventories   allocated  to
unamortized  capitalized  interest (see Note 13). Interest income is included in
other revenues.
                                       46

<PAGE>
(13)     IMPAIRMENT OF SOUTHERN CALIFORNIA REAL ESTATE INVENTORIES

In  connection  with its  adoption of SFAS No. 121 in fiscal  1996,  the Company
incurred a non-cash  loss from  impairment  of southern  California  real estate
inventories  in the amount of $65.0 million ($42.3 million after tax) related to
the valuation of its Sun City Palm Desert active adult community (see Note 1).

In the first six months of fiscal  1996,  net new orders at Sun City Palm Desert
were substantially below both the comparable period of the prior fiscal year and
the  Company's  expectations.  Although  the Company was  encouraged  by net new
orders significantly greater in the first 45 days of the third quarter of fiscal
1996 than in the  comparable  period  in the prior  fiscal  year,  a lower  than
anticipated level of net new orders was expected in the remainder of fiscal 1996
and net new orders for all of fiscal 1996 were  anticipated  to be lower than in
prior fiscal  years.  Additionally,  a national  home builder was  developing an
active adult  community  near Sun City Palm Desert,  which was expected to cause
additional  competitive  pressures at that  community.  Based on these and other
factors,  the Company  reduced its  estimate  with respect to net new orders and
closings in the fiscal years ending June 30, 1997 and beyond to below the levels
achieved  in the three  fiscal  years  ended June 30,  1995.  This  resulted  in
expected future net cash flows  (undiscounted  and without interest  charges) at
Sun City Palm Desert being less than the book value of the asset. As required by
SFAS No. 121, the Company therefore recorded in fiscal 1996 a non-cash loss from
impairment of southern  California  real estate  inventories to reflect Sun City
Palm Desert at its estimated fair value.  Fair value was estimated based upon an
evaluation  of  comparable  market prices and  discounted  expected  future cash
flows.

(14)     CONTINGENT LIABILITIES AND COMMITMENTS

The  Company is a party to various  legal  proceedings  arising in the  ordinary
course of business. While it is not feasible to predict the ultimate disposition
of these  matters,  it is the opinion of management  that their outcome will not
have a material adverse effect on the financial condition of the Company.

The Company has issued  surety bonds and standby  letters of credit  aggregating
$175.0 million at June 30, 1998.

The Company leases from third parties,  under  operating  leases,  office space,
models,  apartment  units  which  it  rents  to  prospective  customers  at  its
large-scale active adult  communities,  automobiles and certain other equipment.
The  leases are  generally  renewable  at the  Company's  option for  additional
periods.  Total rent  expense  incurred by the Company was $10.5  million,  $7.5
million  and $6.9  million  for the years  ended June 30,  1998,  1997 and 1996,
respectively.

Minimum  lease  payments  (in  thousands)  to  be  made  by  the  Company  under
non-cancelable lease agreements are as follows:


                      1999                $      6,999
                      2000                       4,696
                      2001                       3,062
                      2002                       2,260
                      2003                       2,085
                      Later years                5,854
                                          ------------
                                          $     24,956
                                          ============
                                       47

<PAGE>
(15)     QUARTERLY FINANCIAL INFORMATION (Unaudited)

Quarterly  financial  information  for the years ended June 30, 1998 and 1997 is
presented  below.  The sum of the  individual  quarterly  data may not equal the
annual  data  due to  rounding  and  fluctuations  in  weighted  average  shares
outstanding on a quarter-to-quarter basis.

<TABLE>
<CAPTION>
                                                    In Thousands Except Per Share Data
                                                             Three Months Ended
-------------------------------------------------------------------------------------------------------
                                      June 30,        March 31,       December 31,       September 30,
                                        1998            1998              1997               1997
-------------------------------------------------------------------------------------------------------
<S>                                 <C>             <C>               <C>                <C>           
Revenues                            $    396,075    $    254,714      $      278,935     $      248,043
Net earnings                              17,622           7,520              11,266              6,125
Net earnings per share                       .97             .42                 .64                .35
Net earnings per share -
 assuming dilution                           .94             .40                 .62                .34
-------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------
                                       June 30,        March 31,       December 31,       September 30,
                                         1997            1997              1996               1996
-------------------------------------------------------------------------------------------------------
Revenues                            $    347,968    $    280,317      $      293,682     $      264,295
Earnings before extraordinary
  item                                    13,319           9,576              10,799              5,992
Net earnings                              13,319           8,291              10,799              5,992
Earnings per share before
  extraordinary item                         .76             .54                 .61                .34
Earnings per share before
 extraordinary item - assuming
 dilution                                    .75             .54                 .60                .33
Net earnings per share                       .76             .47                 .61                .34
Net earnings per share -
  assuming dilution                          .75             .46                 .60                .33
-------------------------------------------------------------------------------------------------------
</TABLE>
                                       48

<PAGE>
                      DEL WEBB CORPORATION AND SUBSIDIARIES          SCHEDULE II
                        VALUATION AND QUALIFYING ACCOUNTS            -----------
                    Years ended June 30, 1998, 1997 and 1996

<TABLE>
<CAPTION>
                                                                            In Thousands
---------------------------------------------------------------------------------------------------------------------
                                                                    Additions   Additions
                                                    Balance at     Charged to   Charged to
                                                   Beginning of    Costs and       Other                   Balance at
                                                       Year         Expenses     Accounts    Deductions   End of Year
---------------------------------------------------------------------------------------------------------------------
<S>                                               <C>             <C>           <C>          <C>            <C>      
1998                                                             
----                                                             
Reserve for residential land development project  $      7,491    $       -     $    407     $      -       $   7,898
Reserves for disposal costs of discontinued                                                                  
   operations                                           10,382            -            -          679           9,703
---------------------------------------------------------------------------------------------------------------------
                                                  $     17,873    $       -     $    407     $    679       $  17,601
=====================================================================================================================
                                                                                                             
1997                                                                                                         
----                                                                                                         
Reserve for residential land development project  $      7,126    $     365     $      -     $      -       $   7,491
Reserves for disposal costs of discontinued                                                                  
   operations                                           12,209            -            -        1,827          10,382
---------------------------------------------------------------------------------------------------------------------
                                                  $     19,335    $     365     $      -     $  1,827       $  17,873
=====================================================================================================================
                                                                                                             
1996                                                                                                         
----                                                                                                         
Reserve for residential land development project  $      8,264    $       -     $      -     $  1,138       $   7,126
Reserves for disposal costs of discontinued                                                                  
   operations                                           27,855            -            -       15,646          12,209
---------------------------------------------------------------------------------------------------------------------
                                                  $     36,119    $       -     $      -     $ 16,784       $  19,335
=====================================================================================================================
</TABLE>
                                       49
<PAGE>
                              DEL WEBB CORPORATION
                           Report on Form 10-K For The
                            Year Ended June 30, 1998


                               10-K EXHIBIT INDEX
                               ------------------
                        NON-FINANCIAL STATEMENT EXHIBITS
                        --------------------------------


Exhibits Filed

Exhibit No.
-----------

    10.1          Form of Change of Control  Agreement  between  Registrant  and
                  certain of its officers.

    10.2          Second  Amended and Restated  Revolving  Loan Agreement by and
                  among Del Webb  Corporation and Bank of America National Trust
                  and Savings Association as Agent, and Bank One Arizona, NA, as
                  Co-Agent, dated June 5, 1998.

    10.3          Current  list  of  participants  to the Del  Webb  Corporation
                  Supplemental Executive Retirement Plan No. 2. 

    10.4          Del Webb  Corporation  Management  Incentive  Plan Fiscal 1999
                  (July 1, 1998 - June 30, 1999).

    10.5          1998/99  Executive  Management  Incentive Plan Award Agreement
                  between the Registrant and Philip J. Dion dated July 23, 1998.

    10.6          1998/99  Executive  Management  Incentive Plan Award Agreement
                  between the Registrant  and LeRoy C. Hanneman,  Jr. dated July
                  23, 1998.

    21.0          Subsidiaries of the Registrant.
<PAGE>
    23.0          Consent of KPMG Peat Marwick LLP.

    27            Financial Data Schedule.

    27.1          Restated June 30, 1997 Financial Data Schedule.


      In addition to those Exhibits shown above, the Company hereby incorporates
the  following  Exhibits* pursuant  to Exchange  Act Rule 12b-32 and  Regulation
ss.229.10(d) by reference to the fillings set forth below:

Exhibit No.
-----------

     3.0          Amended  and  Restated  Certificate  of  Incorporation  of the
                  Registrant,  incorporated  by  reference  to  Exhibit  99.0 to
                  Registrant's  Report  on  Form  10-Q  for  the  quarter  ended
                  September 30, 1994.

     3.1          The Bylaws of the  Registrant  effective  November 1, 1994, as
                  amended on February  13,  1996,  incorporated  by reference to
                  Exhibit 3.1 to  Registrant's  Report on Form 10-K for the year
                  ended June 30, 1996.

     4.1          Indenture  dated as of May 11,  1998  between  Registrant  and
                  State Street Bank and Trust Company, as Trustee,  defining the
                  rights of holders of the 9 3/8% Senior Subordinated Debentures
                  due  2009,   incorporated  by  reference  to  Exhibit  1.1  to
                  Registrant's Report on Form 8-K dated May 11,
                  1998.

     4.2          Indenture  dated as of March 8, 1993  between  Registrant  and
                  Fidelity  Trust  Company,  New York, as Trustee,  defining the
                  rights  of  the  holders  of the 9  3/4%  Senior  Subordinated
                  Debentures due 2003,  incorporated by reference to Exhibit 4.1
                  to Registrant's Report on Form 8-K dated March 8,
                  1993.

     4.3          Indenture  dated as of February 11, 1994,  between  Registrant
                  and The Bank of New York,  as Trustee,  defining the rights of
                  the holders of the 9% Senior Subordinated Debentures due 2006,
                  incorporated  by  reference  to  Exhibit  4.1 to  Registrant's
                  Report on Form 8-K dated February 11, 1994.

     4.4          Indenture  dated as of January 21, 1997,  between  Registrant,
                  State Street Bank and Trust Company, as Trustee,  defining the
                  rights  of  the  holders  of the 9  3/4%  Senior  Subordinated
                  Debentures due 2008,  incorporated by reference to Exhibit 1.1
                  to Registrant's Report on Form 8-K dated January 21, 1997.
                                        2
<PAGE>
    10.7          Office Lease Agreement  between Western Plaza Investors,  L.P.
                  and Registrant dated April 20, 1994, incorporated by reference
                  to Exhibit  10.6 to  Registrant's  Report on Form 10-K for the
                  year ended June 30, 1994; as amended by the First Amendment to
                  Lease dated  February 29, 1996,  incorporated  by reference to
                  Exhibit 10.6 to Registrant's  Report on Form 10-K for the year
                  ended June 30, 1996.

    10.8          Del Webb Corporation Deferred Compensation Plan effective June
                  1,  1993,   incorporated  by  reference  to  Exhibit  10.7  to
                  Registrant's  Report on Form 10-K for the year  ended June 30,
                  1993.

    10.9          1981 Stock Option Plan, as amended,  incorporated by reference
                  to Exhibit 10.18 to  Registrant's  Report on Form 10-K for the
                  year ended June 30, 1993.

    10.10         1986 Stock Option and SAR Plan of the Del Webb Corporation, as
                  amended,   incorporated  by  reference  to  Exhibit  10.19  to
                  Registrant's  Report on Form 10-K for the year  ended June 30,
                  1993.

    10.11         Del  Webb  Corporation   Executive  Long-Term  Incentive  Plan
                  adopted  November  20,  1991,  as  amended,   incorporated  by
                  reference to Exhibit 10.10 to Registrant's Report on Form 10-K
                  for the year ended June 30, 1997.

    10.12         Del Webb  Corporation  1993 Executive Long Term Incentive Plan
                  dated March 17, 1994, as amended, incorporated by reference to
                  Exhibit 10.11 to Registrant's Report on Form 10-K for the year
                  ended June 30, 1997.

    10.13         Del Webb Corporation 1995 Executive  Long-Term  Incentive Plan
                  adopted July 13, 1995, as amended,  incorporated  by reference
                  to Exhibit 10.25 to  Registrant's  Report on Form 10-K for the
                  year ended June 30, 1997.

    10.14         Del Webb  Corporation  Director  Stock Plan dated November 20,
                  1991,   incorporated   by  reference   to  Exhibit   10.13  to
                  Registrant's  Report on Form 10-K for the year  ended June 30,
                  1993.

    10.15         Del Webb Corporation 1995 Director Stock Plan adopted July 13,
                  1995,   incorporated   by  reference   to  Exhibit   10.26  to
                  Registrant's  Report on Form 10-K for the year  ended June 20,
                  1995.

    10.16         Del E. Webb Corporation Umbrella Trust dated June 11, 1987, as
                  amended,   incorporated  by  reference  to  Exhibit  10.23  to
                  Registrant's  Report on Form 10-K for the year  ended June 30,
                  1996.
                                        3
<PAGE>
    10.17         Del Webb Corporation 1995 Executive  Management Incentive Plan
                  adopted  July 13, 1995,  incorporated  by reference to Exhibit
                  10.27 to  Registrant's  Report on Form 10-K for the year ended
                  June 30, 1995.

    10.18         Key  Executive   Life  Insurance  Plan  dated  May  15,  1991,
                  incorporated  by  reference to Exhibit  10.10 to  Registrant's
                  Report  on Form  10-K for the year  ended  June 30,  1991;  as
                  amended on November  18,  1994,  incorporated  by reference to
                  Exhibit 10.9 to Registrant's  Report on Form 10-K for the year
                  ended June 30, 1996.

    10.19         Key  Executive  Life  Insurance  Plan II dated  April 1, 1992,
                  incorporated  by  reference  to Exhibit  10.8 to  Registrant's
                  Report  on Form  10-K for the year  ended  June 30,  1992;  as
                  amended on  November 8, 1994,  incorporated  by  reference  to
                  Exhibit 10.8 to Registrant's  Report on Form 10-K for the year
                  ended June 30, 1996.

    10.20         Key   Executive   Life  Plan  Plus  dated   August  23,  1995,
                  incorporated  by  reference to Exhibit  10.32 to  Registrant's
                  Report on Form 10-K for the year ended June 30, 1996.

    10.21         Key   Executive   Life  Plan  1995  dated   October  5,  1995,
                  incorporated  by  reference to Exhibit  10.33 to  Registrant's
                  Report on Form 10-K for the year ended June 30, 1996.

    10.22         Senior  Officer  Medical  and Dental  Reimbursement  Plan,  as
                  amended  and  restated  November  16,  1992,  incorporated  by
                  reference to Exhibit 10.17 to Registrant's Report on Form 10-K
                  for the year ended June 30, 1993.

    10.23         Group  Term   Carve-Out   Plan  dated   November   18,   1994,
                  incorporated  by  reference to Exhibit  10.34 to  Registrant's
                  Report on Form 10-K for the year ended June 30, 1996.

    10.24         Del Webb Corporation  Supplemental  Executive  Retirement Plan
                  No. 1, as amended and restated April 20, 1993, incorporated by
                  reference to Exhibit 10.12 to Registrant's Report on Form 10-K
                  for the  year  ended  June  30,  1993;  as  amended  by  First
                  Amendment to the Del Webb Corporation  Supplemental  Executive
                  Retirement Plan No. 1 effective July 1, 1995,  incorporated by
                  reference to Exhibit 10.13 to Registrant's Report on Form 10-K
                  for the year ended June 30, 1995.

    10.25         Supplemental  Executive  Retirement  Plan No. 1  Participation
                  Agreement  between the Registrant and Philip J. Dion,  amended
                  and restated effective
                                        4
<PAGE>
                  July 25, 1996,  incorporated  by reference to Exhibit 10.30 to
                  Registrant's  Report on Form 10-K for the year  ended June 30,
                  1996.

    10.26         Supplemental  Executive  Retirement  Plan No. 1  Participation
                  Agreement as of April 11, 1997 between the Registrant and John
                  H.  Gleason,  incorporated  by reference  to Exhibit  10.40 to
                  Registrant's  Report on Form 10-K for the year  ended June 30,
                  1997.

    10.27         Supplemental  Executive  Retirement  Plan No. 1  Participation
                  Agreement  as of April 11,  1997  between the  Registrant  and
                  LeRoy C. Hanneman., incorporated by reference to Exhibit 10.41
                  to  Registrant's  Report on Form 10-K for the year  ended June
                  30, 1997.

    10.28         Supplemental  Executive  Retirement  Plan No. 1  Participation
                  Agreement as of April 11, 1997 between the Registrant and Anne
                  L.  Mariucci,  incorporated  by reference to Exhibit  10.42 to
                  Registrant's  Report on Form 10-K for the year  ended June 30,
                  1997.

    10.29         Employment  and  Consulting  Agreement  dated  July 10,  1996,
                  between the  Registrant  and Philip J. Dion,  incorporated  by
                  reference to Exhibit 10.2 to Registrant's  Report on Form 10-K
                  for the year ended June 30, 1996.

    10.30         Employment   Agreement   dated  April  11,  1997  between  the
                  Registrant and John H. Gleason,  incorporated  by reference to
                  Exhibit 10.36 to Registrant's Report on Form 10-K for the year
                  ended June 10, 1997.

    10.31         Employment   Agreement   dated  April  11,  1997  between  the
                  Registrant and LeRoy C. Hanneman, incorporated by reference to
                  Exhibit 10.37 to Registrant's Report on Form 10-K for the year
                  ended June 30, 1997.

    10.32         Employment   Agreement   dated  April  11,  1997  between  the
                  Registrant and Anne L. Mariucci,  incorporated by reference to
                  Exhibit 10.38 to Registrant's Report on Form 10-K for the year
                  ended June 30, 1997.

    10.33         Form  of  Directors  and  Officers  Indemnification  Agreement
                  between   Registrant   and   its   directors   and   officers,
                  incorporated  by  reference to Exhibit  10.24 to  Registrant's
                  Report on Form 10-K for the year ended June 30, 1997.

    10.34         Asset  Acquisition  Agreement,  dated December 22, 1997 by and
                  among Del Webb  Communities,  Inc.  and Spruce  Creek Golf and
                  Country  Club,   Inc., Spruce  Creek  Golf  and  Country  Club
                  Homeowners'  Association,   Inc.  and  Spruce  Creek  Preserve
                  Homeowners'  Association,  Inc.  incorporated  by reference to
                  Exhibit 99.1 to Registrant's Report on Form 10-Q dated May 14,
                  1998.

    10.35         Agreement of Purchase  and Sale between Del Webb  Conservation
                  Holding Corp. and American Land Conservancy for acquisition of
                  Dreyfus property located on the eastern shore of Lake Tahoe in
                  Washoe County,  Nevada,  incorporated  by reference to Exhibit
                  10.1 to  Registrant's  Report on Form 10-Q dated  February  9,
                  1998.

    10.36         Del Webb Corporation  Supplemental  Executive  Retirement Plan
                  No. 2, as amended and restated April 20, 1993, incorporated by
                  reference to Exhibit 10.16 to Registrant's Report on Form 10-K
                  for the  year  ended  June  30,  1993;  as  amended  by  First
                  Amendment to the Del Webb Corporation  Supplemental  Executive
                  Retirement Plan No. 2 effective July 1, 1995,  incorporated by
                  reference to Exhibit 10.16 to Registrant's Report on Form 10-K
                  for the year ended June 30, 1995.

*    Reports  filed  under  File No.  1-4785  were  filed in the  office  of the
     Security and Exchange Commission located in Washington, D.C.
                                       5