Del Webb CEO Says New Strategic Plan Focuses on Baby Boomers, Seniors

PHOENIX, Dec. 6, 2000 -- Building on four decades as the undisputed leader in the development of active adult communities, Del Webb Corporation  today unveiled far-reaching new business strategies designed to leverage the company's extensive expertise in Baby Boomers, retirement, and innovative lifestyle communities.

The new strategic plan was previewed to investors by Webb's management in New York at Barclay Capital's Global High Yield Debt Conference.

At the plan's center are three key initiatives: new business models, operational efficiencies and brand-extending ancillary businesses. The plan includes utilizing other homebuilders to broaden the product offering within Webb's communities and the utilization of joint ventures with strategically selected partners.

``Del Webb is unquestionably the leader in the most attractive segment of the housing industry. We did not win or sustain this position by resting comfortably upon the cushion of one good idea,'' said President and Chief Executive Officer LeRoy Hanneman. ``Today Webb's spirit for innovation is intensely focused on profitable new opportunities and building shareholder value made possible by our incomparable position in this industry.''

Hanneman underlined to the conference that Webb is headed for its fifth straight year of record earnings and its core business has never been stronger as the first of 76 million aging Baby Boomers begin to enter the company's target ``55 plus'' market in 2001. He said Webb would continue to add to its 17 large-scale Sun City and other active adult communities that stretch from coast to coast. But, he emphasized that Webb is determined to maximize its strengths with a number of other strategic initiatives, including building on its already-popular Anthem multi-generational and country club communities.

``This plan is a substantial change in the way the company conducts business. These changes are intended to build shareholder value, improve financial returns, strengthen the balance sheet, create more efficiencies and support future growth,'' Hanneman said. ``Webb will also continue to do what we do better than any company in the world. We will continue to build large active adult communities throughout the country.''

    Among the new business models the company is examining are:

    --  Smaller active adult communities in the range of 1,000 -- 3,000 acres
        that would require reduced capital investment and be attractive in a
        variety of markets.
    --  A greater emphasis on new country club communities that can serve the
        baby boom market while delivering enhanced homebuilding margins.
    --  New "specialty" communities such as smaller scale multi-generational
        communities that provide lifestyle amenities to the family market.
    --  Master-planned community land and/or lot sales to selected
        homebuilders or joint venture partners to improve the company's return
        on invested capital.

In terms of operational efficiencies, Hanneman said the company is already implementing its plans to standardize and consolidate many of its business functions. ``Webb has reached a size that allows cost reductions in many areas including marketing, land development and housing construction,'' he said. ``Our initiative to web-enable our business systems will deliver significant savings and improve cycle times and customer service levels. A continuing key objective is to reduce SG&A costs to below 13 percent of revenues this fiscal year, achieve further reductions in FY02 and continue to decrease the percentage in future years,'' he said.

In terms of leveraging the Del Webb brand into new ancillary business, the company is exploring:

    --  Instituting initiatives to capitalize on broadband infrastructure
        opportunities and related services in our large scale communities
    --  Capitalizing on commercial real estate opportunities adjacent and
        within its master planned communities.
    --  Packaging market-targeted financial services and wellness programs
        developed in partnership with other brand name providers in those
        areas.
    --  Developing for the lucrative travel market an interval ownership
        program (timeshare) available for all residents.
    --  Establishing strategic alliances relating to the company's loyal
        customer base and demographic attributes.

Hanneman also said the company will pursue joint venture arrangements with other real estate companies that can create ``win-win'' opportunities across the country. ``We have a very deep knowledge-base and execution skill set regarding the strategic acquisition and entitlement of property resulting in significant value creation,'' he said.

During the conference, the company said it expects to reduce its debt-to-total capital to 66 percent by December 31, 2000 and its objective is to achieve 60 percent or lower by the end of FY03. Executive Vice President and Chief Financial Officer John Spencer said strong earnings, no major capital expenditures on new communities and selected land sales have all contributed to the company's leverage reduction. He said the company is strongly committed to further reduction in its leverage resulting in positive impacts on other financial metrics.

``In the future, we will implement off-balance sheet land acquisitions through joint ventures, seller land financing and land options,'' Spencer said. ``We have always been an innovative company and today that innovation is focused on delivering shareholder value. This strategic plan will undoubtedly position Webb as the industry leader for decades to come.''

Del Webb Corporation, based in Phoenix, is the nation's leading builder of active adult communities for people age 55 and older. The company operates 12 active adult communities in markets including Phoenix and Tucson, Ariz.; Las Vegas, Nev.; Palm Desert, Lincoln and Cloverdale, Calif.; Hilton Head, S.C.; Georgetown, Texas; Ocala, Fla.; and Chicago, Il. The company also builds family and country club communities in Phoenix and Las Vegas.

This press release contains forward-looking statements that involve risks and uncertainties, and actual results may differ materially. Certain forward-looking statements are based on assumptions that may not prove to be accurate. Risks and uncertainties include risks associated with: the cyclical nature of real estate operations; land acquisition and development, government regulation, growth management and environmental considerations; geographic concentration; financing and leverage; interest rate fluctuations; construction labor and materials costs; future communities and new geographic markets; legal matters; natural risks; and other matters set forth in the Company's Form 10-K for the year ended June 30, 2000 and subsequent SEC filings.

To access other news about Del Webb Corporation, visit the company's Internet site at http://www.delwebb.com