EX-99.1 2 d35612exv99w1.htm UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS exv99w1
 

Exhibit 99.1
Unaudited Pro Forma Condensed Consolidated Financial Statements
The following unaudited condensed consolidated balance sheet as of December 31, 2005 and the unaudited condensed consolidated statements of earnings for the nine months ended December 31, 2005 and the year ended March 31, 2005, have been prepared to present the consolidated financial position and the consolidated results of operations of the Company as if the planned sale of Centex Home Equity Company, LLC (“CHEC”) had occurred on December 31, 2005 for the unaudited pro forma condensed consolidated balance sheet and at the beginning of each period presented for the unaudited condensed consolidated statements of operations. In addition, in September 2005, the Company sold its international homebuilding operations. As a result of the sale, international homebuilding’s results of operations for the nine month period ended December 31, 2005, have previously been reclassified and reported as discontinued operations. International homebuilding’s results of operations are presented as discontinued operations in the accompanying unaudited pro forma condensed consolidated statement of earnings for the year ended March 31, 2005.
These statements are not indicative of the financial position or results of operations of the Company as of December 31, 2005 or for the nine months ended December 31, 2005 or the year ended March 31, 2005, nor are they indicative of future results. In addition, these pro forma financial statements do not reflect changes that may occur as a result of activities subsequent to December 31, 2005, which may impact the planned disposition of CHEC.
For pro forma balance sheet presentation purposes, the receipt of estimated proceeds from the disposition of CHEC is included in cash. The actual cash proceeds to be received on the sale of CHEC will be based in part on CHEC’s net assets at the closing date and may differ from the amount presented in the pro forma financial information.

 

 

Centex Corporation and Subsidiaries
Pro Forma Condensed Consolidated Balance Sheets
December 31, 2005
(Dollars in thousands)
                         
    As Reported(a)     Disposition(s)     Pro Forma  
Assets
                        
Cash and Cash Equivalents
   $ 78,900     $ 602,773 (b)   $ 681,673  
Restricted Cash
     469,113       (328,818 )(b)     140,295  
Receivables -
                        
Residential Mortgage Loans Held for Investment, net
     8,758,681       (8,758,681 )(b)     —  
Residential Mortgage Loans Held for Sale
     1,727,631       —       1,727,631  
Construction Contracts
     307,545       —       307,545  
Trade, including Notes
     435,310       (163,973 )(b)     271,337  
Inventories -
                        
Housing Projects
     8,292,195       —       8,292,195  
Land Held for Development and Sale
     381,100       —       381,100  
Land Held Under Option Agreements Not Owned
     552,984       —       552,984  
Other
     10,405       —       10,405  
Investments -
                        
Joint Ventures and Other
     344,282       —       344,282  
Property and Equipment, net
     162,032       (18,424 )(b)     143,608  
Other Assets -
                        
Deferred Income Taxes
     348,523       (134,012 )(b)     214,511  
Goodwill
     218,369       —       218,369  
Mortgage Securitization Residual Interest
     64,582       (64,582 )(b)     —  
Deferred Charges and Other, net
     272,837       (52,700 )(b)     220,137  
 
                  
 
   $ 22,424,489     $ (8,918,417 )(b)   $ 13,506,072  
 
                  
 
                        
Liabilities and Stockholders’ Equity
                        
Accounts Payable
   $ 824,883     $ (208 )(b)   $ 824,675  
Accrued Liabilities
     1,620,296       (92,373 )(b)     1,527,923  
Debt -
                        
Centex
     4,106,579       —       4,106,579  
Financial Services
     10,583,348       (8,919,150 ) (b)     1,664,198  
Commitments and Contingencies
                        
Minority Interests
     538,911       —       538,911  
Stockholders’ Equity -
                        
Preferred Stock, Authorized 5,000,000 Shares, None Issued
     —       —       —  
Common Stock, $.25 Par Value; Authorized 300,000,000 Shares; Outstanding 123,786,142
     33,956       —       33,956  
Capital in Excess of Par Value
     532,440       —       532,440  
Unamortized Value of Deferred Compensation
     (49 )     —       (49 )
Retained Earnings
     4,864,468       101,043       4,965,511  
Treasury Stock, at Cost; 12,038,622
     (688,017 )     —       (688,017 )
Accumulated Other Comprehensive Income
     7,674       (7,729 )(b)     (55 )
 
                  
Total Stockholders’ Equity
     4,750,472       93,314       4,843,786  
 
                  
 
   $ 22,424,489     $ (8,918,417 )   $ 13,506,072  
 
                  
 
    See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.

 

 

Centex Corporation and Subsidiaries
Pro Forma Condensed Consolidated Statements of Consolidated Earnings
(Dollars in thousands, except per share data)
                         
    For the Nine Months Ended December 31, 2005  
    As Reported(a)     Disposition(s)     Pro Forma  
Revenues
                        
Home Building
   $ 8,291,236     $ —     $ 8,291,236  
Financial Services
     956,145       (612,420 )(c)     343,725  
Construction Services
     1,160,904       —       1,160,904  
Other, including Intersegment Eliminations
     53,570       —       53,570  
 
                  
 
     10,461,855       (612,420 )     9,849,435  
 
                  
 
                        
Costs and Expenses
                        
Home Building
     7,054,047       —       7,054,047  
Financial Services
     800,735       (520,553 )(c)     280,182  
Construction Services
     1,148,023       —       1,148,023  
Other, including Intersegment Eliminations
     61,776       —       61,776  
Corporate General and Administrative
     70,935       —       70,935  
Interest Expense
     8,705       —       8,705  
 
                  
 
     9,144,221       (520,553 )     8,623,668  
 
                  
 
                        
Earnings from Unconsolidated Entities
     67,585       —       67,585  
 
                  
 
                        
Earnings from Continuing Operations Before Income Taxes
     1,385,219       (91,867 )(c)     1,293,352  
Income Taxes
     490,498       (42,396 )(c)     448,102  
 
                  
 
                        
Earnings from Continuing Operations
   $ 894,721     $ (49,471 )   $ 845,250  
 
                  
 
                        
Basic Earnings Per Share
                        
Continuing Operations
   $ 6.99             $ 6.62  
 
                        
Diluted Earnings Per Share
                        
Continuing Operations
   $ 6.68             $ 6.31  
 
                        
Average Shares Outstanding
                        
Basic
     127,933,898               127,933,898  
Dilutive Securities:
                        
Options
     5,578,959               5,578,959  
Other
     441,420               441,420  
 
                    
Diluted
     133,954,277               133,954,277  
 
                    

 

 

Centex Corporation and Subsidiaries
Pro Forma Condensed Statements of Consolidated Earnings
(Dollars in thousands, except per share data)
                         
    For the Year Ended March 31, 2005  
    As Reported(d)     Disposition(s)     Pro Forma  
Revenues
                        
Home Building
   $ 9,860,998     $ (501,257 )(e)   $ 9,359,741  
Financial Services
     1,107,206       (685,553 )(e)     421,653  
Construction Services
     1,738,603       —       1,738,603  
Other, including Intersegment Eliminations
     152,888       —       152,888  
 
                  
 
     12,859,695       (1,186,810 )     11,672,885  
 
                  
 
                        
Costs and Expenses
                        
Home Building
     8,484,461       (434,752 )(e)     8,049,709  
Financial Services
     902,846       (577,165 )(e)     325,681  
Construction Services
     1,717,025       —       1,717,025  
Other, including Intersegment Eliminations
     147,322       —       147,322  
Corporate General and Administrative
     82,877       —       82,877  
Interest Expense
     22,209       (2,861 )(e)     19,348  
 
                  
 
     11,356,740       (1,014,778 )     10,341,962  
 
                  
 
                        
Earnings from Unconsolidated Entities
     70,814       (82 )(e)     70,732  
 
                  
 
                        
Earnings from Continuing Operations Before Income Taxes
     1,573,769       (172,114 )(e)     1,401,655  
Income Taxes
     562,405       (60,292 )(e)     502,113  
 
                  
 
                        
Earnings from Continuing Operations
   $ 1,011,364     $ (111,822 )   $ 899,542  
 
                  
 
                        
Basic Earnings Per Share
                        
Continuing Operations
   $ 8.08             $ 7.19  
 
                        
Diluted Earnings Per Share
                        
Continuing Operations
   $ 7.64             $ 6.79  
 
                        
Average Shares Outstanding
                        
Basic
     125,226,596               125,226,596  
Dilutive Securities:
                        
Options
     6,725,838               6,725,838  
Other
     445,527               445,527  
 
                    
Diluted
     132,397,961               132,397,961  
 
                    

 

 

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
Pro forma adjustments giving effect to the planned disposition of CHEC and the disposition of the international homebuilding operations are as follows:
  (a)   Historical activity as reported in the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2005.
 
  (b)   To eliminate CHEC’s assets and liabilities as a result of the planned disposition after adjusting for transaction-related cash flows as follows: (1) the receipt of estimated cash proceeds (based upon CHEC’s net assets at December 31, 2005 and the estimated premium), and (2) cash received on payment of intercompany accounts. The actual cash proceeds to be received on the sale will be based upon CHEC’s net assets as of the closing date plus a premium to be calculated in accordance with the Securities Purchase Agreement.
 
  (c)   To reflect the elimination of CHEC historical results of operations.
 
  (d)   Historical activity as reported in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2005.
 
  (e)   To reflect the elimination of CHEC and international homebuilding historical results of operations.