-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M6oJYPIgYlHEBsMwh16mH82jgHREVJ0l4RzSO5g1G2EBioQidiuRjRziF98OjJPO VZUaKPH+SJkMNcLJglAODA== 0000950134-98-001097.txt : 19980217 0000950134-98-001097.hdr.sgml : 19980217 ACCESSION NUMBER: 0000950134-98-001097 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980212 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTEX CORP CENTRAL INDEX KEY: 0000018532 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 750778259 STATE OF INCORPORATION: NV FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-06776 FILM NUMBER: 98535756 BUSINESS ADDRESS: STREET 1: P O BOX 199000 STREET 2: 2728 N HARWOOD CITY: DALLAS STATE: TX ZIP: 75219 BUSINESS PHONE: 2145596500 MAIL ADDRESS: STREET 1: PO BOX 199000 STREET 2: 2728 N HARWOOD CITY: DALLAS STATE: TX ZIP: 75219 FORMER COMPANY: FORMER CONFORMED NAME: CENTEX CONSTRUCTION CO INC DATE OF NAME CHANGE: 19681211 FILER: COMPANY DATA: COMPANY CONFORMED NAME: 3333 HOLDING CORP CENTRAL INDEX KEY: 0000818762 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 752178860 STATE OF INCORPORATION: NV FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-09624 FILM NUMBER: 98535757 BUSINESS ADDRESS: STREET 1: 3333 LEE PKWY STREET 2: SUITE 500 CITY: DALLAS STATE: TX ZIP: 75219 BUSINESS PHONE: 2145596700 MAIL ADDRESS: STREET 1: PO BOX 19000 STREET 2: PO BOX 19000 CITY: DALLAS STATE: TX ZIP: 75219 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTEX DEVELOPMENT CO LP CENTRAL INDEX KEY: 0000818764 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 752168471 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-09625 FILM NUMBER: 98535758 BUSINESS ADDRESS: STREET 1: PO BOX 19000 CITY: DALLAS STATE: TX ZIP: 75219 BUSINESS PHONE: 2145596700 MAIL ADDRESS: STREET 1: PO BOX 19000 STREET 2: PO BOX 19000 CITY: DALLAS STATE: TX ZIP: 75219 10-Q 1 FORM 10-Q FOR QUARTER ENDED DECEMBER 31, 1997 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q JOINT QUARTERLY REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter Ended DECEMBER 31, 1997 Commission File No. 1-6776 CENTEX CORPORATION A Nevada Corporation IRS Employer Identification No. 75-0778259 2728 N. Harwood Dallas, Texas 75201 (214) 981-5000 Commission File Nos. 1-9624 and 1-9625, respectively 3333 HOLDING CORPORATION A Nevada Corporation CENTEX DEVELOPMENT COMPANY, L.P. A Delaware Limited Partnership IRS Employer Identification Nos. 75-2178860 and 75-2168471, respectively 2728 N. Harwood Dallas, Texas 75201 (214) 981-6700 The registrants have 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 and have been subject to such filing requirements for the past 90 days. - ------------------------------------------------------------------------------- As of the close of business on February 9, 1998, 29,736,039 shares of Centex Corporation common stock were outstanding, 1,000 shares of common stock of 3333 Holding Corporation were outstanding, and 900 class B units of limited partnership interest of Centex Development Company, L.P. were outstanding. - ------------------------------------------------------------------------------- 2 CENTEX CORPORATION 3333 HOLDING CORPORATION CENTEX DEVELOPMENT COMPANY, L.P. FORM 10-Q TABLE OF CONTENTS DECEMBER 31, 1997 CENTEX CORPORATION
PAGE PART I. FINANCIAL INFORMATION ITEM 1. Condensed Consolidated Financial Statements 1 Condensed Consolidated Statement of Earnings for the Three Months Ended December 31, 1997 2 Condensed Consolidated Statement of Earnings for the Nine Months Ended December 31, 1997 3 Condensed Consolidated Balance Sheets 4 Condensed Consolidated Statement of Cash Flows for the Nine Months Ended December 31, 1997 5 Notes to Condensed Consolidated Financial Statements 6-10 ITEM 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 11-15 PART II. OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K 16 SIGNATURES 17
-i- 3 3333 HOLDING CORPORATION CENTEX DEVELOPMENT COMPANY, L.P.
PAGE PART I. FINANCIAL INFORMATION ITEM 1. Condensed Combining Financial Statements 19 Condensed Combining Statement of Operations for the Three Months Ended December 31, 1997 20 Condensed Consolidated Statement of Operations for the Nine Months Ended December 31, 1997 21 Condensed Combining Balance Sheets 22 Condensed Combining Statement of Cash Flows for the Nine Months Ended December 31, 1997 23 Notes to Condensed Combining Financial Statements 24 ITEM 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 25 PART II. OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K 26 SIGNATURES 27-28
-ii- 4 CENTEX CORPORATION PART I. FINANCIAL INFORMATION CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ITEM 1. The condensed consolidated financial statements include the accounts of Centex Corporation and subsidiaries ("Centex" or the "Company"), and have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's latest annual report on Form 10-K. In the opinion of the Company, all adjustments necessary to present fairly the information in the following condensed consolidated financial statements of the Company have been included. The results of operations for such interim periods are not necessarily indicative of the results for the full year. -1- 5 CENTEX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (dollars in thousands, except per share data) (unaudited)
For the Three Months Ended December 31, ----------------------------- 1997 1996 ------------ ------------ REVENUES Home Building Conventional Housing $ 557,484 $ 566,691 Manufactured Housing 38,239 -- Investment Real Estate 6,088 4,771 Financial Services 64,604 38,190 Construction Products 70,510 59,117 Contracting and Construction Services 246,158 270,338 ------------ ------------ 983,083 939,107 ------------ ------------ COSTS AND EXPENSES Home Building Conventional Housing 515,194 529,834 Manufactured Housing 34,768 -- Investment Real Estate (986) (787) Financial Services 56,097 30,990 Construction Products 49,811 41,826 Contracting and Construction Services 243,652 273,387 Other, net 2,025 654 Corporate General and Administrative 5,014 4,285 Interest Expense 8,293 7,969 Minority Interest 10,292 8,455 ------------ ------------ 924,160 896,613 ------------ ------------ EARNINGS BEFORE INCOME TAXES 58,923 42,494 Income Taxes 21,543 15,031 ------------ ------------ NET EARNINGS $ 37,380 $ 27,463 ============ ============ EARNINGS PER SHARE Basic $ 1.26 $ 0.96 ============ ============ Diluted $ 1.21 $ 0.93 ============ ============ AVERAGE SHARES OUTSTANDING Basic 29,683,411 28,670,420 ============ ============ Diluted 30,879,736 29,670,683 ============ ============ CASH DIVIDENDS PER SHARE $ 0.07 $ 0.05 ============ ============
See notes to condensed consolidated financial statements. -2- 6 CENTEX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (dollars in thousands, except per share data) (unaudited)
For the Nine Months Ended December 31, ------------------------------ 1997 1996 ------------ ------------ REVENUES Home Building Conventional Housing $ 1,605,169 $ 1,704,181 Manufactured Housing 103,727 -- Investment Real Estate 18,199 6,781 Financial Services 169,141 117,113 Construction Products 231,876 185,713 Contracting and Construction Services 708,092 819,333 ------------ ------------ 2,836,204 2,833,121 ------------ ------------ COSTS AND EXPENSES Home Building Conventional Housing 1,493,910 1,600,161 Manufactured Housing 95,200 -- Investment Real Estate (3,643) (6,007) Financial Services 147,866 97,676 Construction Products 160,066 133,172 Contracting and Construction Services 703,384 822,019 Other, net 4,945 1,516 Corporate General and Administrative 14,278 12,760 Interest Expense 24,818 26,760 Minority Interest 35,343 25,900 ------------ ------------ 2,676,167 2,713,957 ------------ ------------ EARNINGS BEFORE INCOME TAXES 160,037 119,164 Income Taxes 59,256 41,642 ------------ ------------ NET EARNINGS $ 100,781 $ 77,522 ============ ============ EARNINGS PER SHARE Basic $ 3.42 $ 2.72 ============ ============ Diluted $ 3.30 $ 2.63 ============ ============ AVERAGE SHARES OUTSTANDING Basic 29,427,192 28,549,797 ============ ============ Diluted 30,524,196 29,518,786 ============ ============ CASH DIVIDENDS PER SHARE $ 0.19 $ 0.15 ============ ============
See notes to condensed consolidated financial statements. -3- 7 CENTEX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in thousands)
Centex Corporation and Subsidiaries Centex Corporation ------------------------------- ------------------------------- December 31, March 31, December 31, March 31, 1997* 1997** 1997* 1997** ------------ ------------ ------------ ------------ ASSETS Cash and Cash Equivalents $ 89,499 $ 31,320 $ 74,709 $ 21,679 Receivables - Residential Mortgage Loans 825,200 632,657 -- -- Other 347,203 354,728 311,685 331,091 Affiliates -- -- -- -- Inventories 1,152,879 1,001,759 1,152,879 1,001,759 Investments - Centex Development Company, L.P. 28,596 32,664 28,596 32,664 Joint Ventures 5,743 5,277 5,743 5,277 Unconsolidated Subsidiaries -- -- 54,584 68,171 Property and Equipment, net 302,161 293,143 282,603 276,627 Other Assets - Deferred Income Taxes 166,279 197,413 166,471 195,983 Goodwill, net 107,272 103,622 96,863 91,442 Deferred Charges and Other 34,327 26,246 22,968 18,233 ------------ ------------ ------------ ------------ $ 3,059,159 $ 2,678,829 $ 2,197,101 $ 2,042,926 ============ ============ ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Accounts Payable and Accrued Liabilities $ 703,092 $ 737,698 $ 644,064 $ 685,050 Short-term Debt 936,757 627,518 137,500 47,000 Long-term Debt 240,183 236,769 240,183 236,769 Minority Stockholders' Interest 144,889 142,230 141,116 139,493 Negative Goodwill 86,837 98,837 86,837 98,837 Stockholders' Equity - Preferred Stock, Authorized 5,000,000 Shares, None Issued -- -- -- -- Common Stock $.25 Par Value; Authorized 50,000,000 Shares; Issued and Outstanding 29,692,312 and 29,016,089 respectively 7,423 7,254 7,423 7,254 Capital in Excess of Par Value 35,075 18,789 35,075 18,789 Retained Earnings 904,903 809,734 904,903 809,734 ------------ ------------ ------------ ------------ Total Stockholders' Equity 947,401 835,777 947,401 835,777 ------------ ------------ ------------ ------------ $ 3,059,159 $ 2,678,829 $ 2,197,101 $ 2,042,926 ============ ============ ============ ============ Financial Services -------------------------------- December 31, March 31, 1997* 1997** ------------ ------------ ASSETS Cash and Cash Equivalents $ 14,790 $ 9,641 Receivables - Residential Mortgage Loans 825,200 632,657 Other 35,518 23,637 Affiliates (894) (19,985) Inventories -- -- Investments - Centex Development Company, L.P. -- -- Joint Ventures -- -- Unconsolidated Subsidiaries -- -- Property and Equipment, net 19,558 16,516 Other Assets - Deferred Income Taxes (192) 1,430 Goodwill, net 10,409 12,180 Deferred Charges and Other 11,359 8,013 ------------ ------------ $ 915,748 $ 684,089 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Accounts Payable and Accrued Liabilities $ 59,028 $ 52,648 Short-term Debt 799,257 580,518 Long-term Debt -- -- Minority Stockholders' Interest 3,773 2,737 Negative Goodwill -- -- Stockholders' Equity - Preferred Stock, Authorized 5,000,000 Shares, None Issued -- -- Common Stock $.25 Par Value; Authorized 50,000,000 Shares; Issued and Outstanding 29,692,312 and 29,016,089 respectively 1 1 Capital in Excess of Par Value 46,444 44,075 Retained Earnings 7,245 4,110 ------------ ------------ Total Stockholders' Equity 53,690 48,186 ------------ ------------ $ 915,748 $ 684,089 ============ ============
See notes to condensed consolidated financial statements. * Unaudited ** Condensed from audited financial statements. In the supplemental data presented above, "Centex Corporation" represents the adding together of all subsidiaries other than those included in Financial Services. Transactions between Centex Corporation and Financial Services have been eliminated from the Centex Corporation and Subsidiaries balance sheets. -4- 8 CENTEX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (dollars in thousands) (unaudited)
For the Nine Months Ended December 31, ------------------------- 1997 1996 --------- --------- CASH FLOWS - OPERATING ACTIVITIES Net Earnings $ 100,781 $ 77,522 Adjustments - Depreciation and Amortization 18,265 9,851 Deferred Income Taxes 38,986 27,807 Equity in Earnings of CDC and Joint Ventures (3,742) (1,671) Minority Interest in Earnings of Subsidiaries 35,343 25,900 Decrease (Increase) in Receivables 7,525 (9,458) (Increase) Decrease in Residential Mortgage Loans (192,543) 3,667 (Increase) Decrease in Inventories (151,120) 29,024 (Decrease) Increase in Payables and Accruals (34,606) 16,924 Increase in Other Assets (25,272) (31,328) Other, net (32,684) 1,225 --------- --------- (239,067) 149,463 --------- --------- CASH FLOWS - INVESTING ACTIVITIES Decrease in Advances to CDC and Joint Ventures 7,344 2,291 Increase in Property and Equipment, net (33,594) (4,099) --------- --------- (26,250) (1,808) --------- --------- CASH FLOWS - FINANCING ACTIVITIES Increase (Decrease) in Debt 312,653 (90,522) Proceeds from Stock Option Exercises 16,455 7,099 Dividends Paid (5,612) (4,293) --------- --------- 323,496 (87,716) --------- --------- NET INCREASE IN CASH 58,179 59,939 CASH AT BEGINNING OF PERIOD 31,320 14,042 --------- --------- CASH AT END OF PERIOD $ 89,499 $ 73,981 ========= =========
See notes to condensed consolidated financial statements. -5- 9 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1997 (unaudited) (A) A summary of changes in stockholders' equity is presented below:
Capital in Preferred Common Excess of Retained Stock Stock Par Value Earnings Total --------- --------- --------- ---------- --------- (dollars in thousands) Balance, March 31, 1997 $ -- $ 7,254 $ 18,789 $ 809,734 $ 835,777 Net Earnings -- -- -- 100,781 100,781 Exercise of Stock Options -- 169 16,286 -- 16,455 Cash Dividends -- -- -- (5,612) (5,612) --------- --------- --------- --------- --------- BALANCE, DECEMBER 31, 1997 $ -- $ 7,423 $ 35,075 $ 904,903 $ 947,401 ========= ========= ========= ========= =========
(B) On November 30, 1987 the Company distributed to a nominee, all of the issued and outstanding shares of common stock of 3333 Holding Corporation and warrants to purchase approximately 80% of the Class B units of limited partnership interest in Centex Development Company, L. P. (CDC). A wholly-owned subsidiary of 3333 Holding Corporation serves as general partner of Centex Development Company, L. P. These securities are held by the nominee on behalf of Centex stockholders, and will trade in tandem with the common stock of Centex, until such time as they are detached. Supplementary condensed combined financial statements for Centex, 3333 Holding Corporation and Subsidiary and Centex Development Company, L. P. are as follows: -6- 10 NOTES - continued CENTEX CORPORATION, 3333 HOLDING CORPORATION AND SUBSIDIARY AND CENTEX DEVELOPMENT COMPANY, L. P. SUPPLEMENTARY CONDENSED COMBINED BALANCE SHEETS (dollars in thousands)
December 31, March 31, 1997 1997* ------------ ------------ ASSETS Cash and Cash Equivalents $ 90,091 $ 31,950 Receivables 1,180,781 989,886 Inventories 1,189,596 1,041,855 Investments in Joint Ventures 5,812 5,479 Property and Equipment, net 302,161 293,143 Other Assets 307,978 327,281 ------------ ------------ $ 3,076,419 $ 2,689,594 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Accounts Payable and Accrued Liabilities $ 707,308 $ 740,230 Short-term Debt 948,563 634,573 Long-term Debt 240,183 236,769 Minority Stockholders' Interest 144,889 142,230 Negative Goodwill 86,837 98,837 Stockholders' Equity 948,639 836,955 ------------ ------------ $ 3,076,419 $ 2,689,594 ============ ============
*Condensed from audited financial statements SUPPLEMENTARY CONDENSED COMBINED STATEMENT OF EARNINGS (dollars in thousands) For the Nine Months Ended December 31, ----------------------------- 1997 1996 ------------ ------------ Revenues $ 2,847,726 $ 2,840,658 Costs and Expenses 2,687,629 2,721,279 ------------ ------------ Earnings Before Income Taxes 160,097 119,379 Income Taxes 59,256 41,642 ------------ ------------ NET EARNINGS $ 100,841 $ 77,737 ============ ============ -7- 11 Notes - continued (C) In order to assure the future availability of land for its Home Building operation, the Company has made deposits totaling $22 million as of December 31, 1997 for options to purchase undeveloped land and developed lots having a total purchase price of approximately $573 million. These options and commitments expire at various dates to the year 2003. The Company has also committed to purchase land and developed lots totaling approximately $8 million. In addition, the Company has executed lot purchase contracts with CDC which aggregate approximately $7 million. (D) Interest expense relating to the Financial Services operations is included in its costs and expenses. Interest related to non-financial services is included as interest expense.
Nine Months Ended ----------------------- 12/31/97 12/31/96 -------- -------- Total Interest Incurred $ 56,491 $ 50,946 Less - Financial Services (31,673) (24,186) -------- -------- Interest Expense $ 24,818 $ 26,760 ======== ========
(E) During April, 1994, Centex Construction Products, Inc. (CXP) completed an initial public offering of its stock which began trading on the New York Stock Exchange under the symbol "CXP". Centex's ownership interest in CXP was 54.6% as of December 31, 1997. (F) During the quarter ended June 30, 1996, Centex's Home Building subsidiary completed a business combination transaction and reorganization with Vista Properties, Inc. As a result of the combination, Centex's Investment Real Estate portfolio, valued in excess of $125 million, was reduced to a nominal "book basis" after recording certain Vista-related tax benefits. As these properties are developed or sold, the net sales proceeds will be reflected as operating margin. "Negative Goodwill" recorded as a result of the business combination is being amortized to earnings over approximately seven years which represents the estimated period over which the land will be developed and/or sold. All investment property operations are being reported through Centex's "Investment Real Estate" business segment. (G) During March, 1997, Centex Real Estate Corporation acquired 78% of Cavco Industries, Inc.'s (Cavco) outstanding common stock for a total of $74.3 million. Goodwill of $68.7 million was recorded in connection with the acquisition (approximately $53.6 million relates to the 78% acquired by Centex) and is being amortized to earnings over 30 years. Cavco's operations are being reported through the "Manufactured Housing" segment within the Home Building line of business. (H) In March 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings Per Share" (SFAS No. 128). This Statement establishes new standards for computing and presenting earnings per share (EPS). SFAS No. 128 replaces the presentation of primary EPS previously prescribed by Accounting Principles Board Opinion No. 15 (APB No. 15) with a presentation of basic EPS which is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. -8- 12 Notes - continued SFAS No. 128 also requires dual presentation of basic and diluted EPS. Diluted EPS is computed similarly to fully diluted EPS pursuant to APB No. 15. This Statement is effective for financial statements issued for periods ending after December 15, 1997, and requires restatement of all prior- period EPS data presented. The following tables reconcile the computation of basic EPS and diluted EPS for the quarter and nine months ended December 31, 1997 and December 31, 1996.
For the Three Months Ended December 31, 1997 --------------------------------------- Income Shares Per-Share (Numerator) (Denominator) Amount ----------- ------------- --------- BASIC EPS - Net earnings available to common stockholders $37,380,000 29,683,411 $1.26 ===== EFFECT OF DILUTIVE SECURITIES Options -- 996,325 Convertible debenture 25,360 200,000 ----------- ----------- DILUTED EPS - Net earnings available to common stockholders + assumed conversions $37,405,360 30,879,736 $1.21 =========== =========== =====
For the Nine Months Ended December 31, 1997 ----------------------------------------- Income Shares Per-Share (Numerator) (Denominator) Amount ----------- ------------- --------- BASIC EPS - Net earnings available to common stockholders $100,781,000 29,427,192 $3.42 ===== EFFECT OF DILUTIVE SECURITIES Options -- 897,004 Convertible debenture 75,834 200,000 ------------ ------------ DILUTED EPS - Net earnings available to common stockholders + assumed conversions $100,856,834 30,524,196 $3.30 ============ ============ =====
Note: Options to purchase 10,000 shares of common stock at approximately $65 per share (expiring in November, 2007) were outstanding during the quarter ended and as of December 31, 1997 but were not included in the computation of diluted EPS because the options' exercise price was greater than the average market price of the common shares. -9- 13 Notes - continued
For the Three Months Ended December 31, 1996 -------------------------------------- Income Shares Per-Share (Numerator) (Denominator) Amount ----------- ------------- --------- BASIC EPS - Net earnings available to common stockholders $27,463,000 28,670,420 $.96 ==== EFFECT OF DILUTIVE SECURITIES Options -- 800,263 Convertible debenture 24,872 200,000 ----------- ----------- DILUTED EPS - Net earnings available to common stockholders + assumed conversions $27,487,872 29,670,683 $.93 =========== =========== ====
For the Nine Months Ended December 31, 1996 -------------------------------------- Income Shares Per-Share (Numerator) (Denominator) Amount ----------- ------------- --------- BASIC EPS - Net earnings available to common stockholders $77,522,000 28,549,797 $2.72 ===== EFFECT OF DILUTIVE SECURITIES Options -- 768,989 Convertible debenture 73,689 200,000 ----------- ----------- DILUTED EPS - Net earnings available to common stockholders + assumed conversions $77,595,689 29,518,786 $2.63 =========== =========== =====
(I) In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income", which requires that changes in comprehensive income be shown in a financial statement that is displayed with the same prominence as other financial statements. This Statement is effective for fiscal years beginning after December 15, 1997. The Company does not expect adoption of the Statement to have a material effect on the presentation of its financial statements. In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 131, "Disclosures About Segments of an Enterprise and Related Information", (SFAS No. 131) which changes the way public companies report information about segments. SFAS No. 131, which is based on the management approach to segment reporting, requires companies to report selected quarterly segment information and entity-wide disclosures about products and services, major customers, and the material countries in which the entity holds assets and reports revenues. This Statement is effective for financial statements for fiscal years beginning after December 15, 1997. The Company does not expect adoption of the Statement to have a material effect on the presentation of its financial statements. -10- 14 CENTEX CORPORATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Centex's consolidated revenues for the quarter were $983.1 million, a 5% increase over $939.1 million for the same quarter last year. Earnings before income taxes were $58.9 million, 39% higher than $42.5 million last year. Net earnings were $37.4 million and diluted earnings per share were $1.21 for this quarter compared to $27.5 million and $.93, respectively, for the same quarter last year. For the nine months ended December 31, 1997, corporate revenues totaled $2.8 billion, about equal to revenues for the same period last year. Earnings before income taxes were $160.0 million, 34% higher than $119.2 million for the same period last year. Net earnings were a record $100.8 million and diluted earnings per share were $3.30 for the current nine months compared to $77.5 million and $2.63 last year. HOME BUILDING Conventional Housing The following summarizes Conventional Housing results for the quarter and fiscal year-to-date ended December 31, 1997 compared to the quarter and fiscal year-to-date ended December 31, 1996 (dollars in millions, except per unit data):
Quarter Ended Quarter Ended 12/31/97 12/31/96 --------------------------- -------------------------- Conventional Housing Revenues $ 557.5 100.0% $ 566.7 100.0% Cost of Sales (441.9) (79.3%) (464.3) (81.9%) Selling, General & Administrative (73.3) (13.1%) (65.6) (11.6%) ---------- ---------- ---------- ---------- Operating Earnings $ 42.3 7.6% $ 36.8 6.5% ========== ========== ========== ========== Units Closed 3,025 3,226 % Change (6.2%) 9.4% Unit Sales Price $ 181,266 $ 172,536 % Change 5.1% 4.4% Operating Earnings per Unit $ 13,980 $ 11,425 % Change 22.4% 17.8%
Fiscal Fiscal Year-to-Date Year-to-Date 12/31/97 12/31/96 -------------------------- -------------------------- Conventional Housing Revenues $ 1,605.2 100.0% $ 1,704.2 100.0% Cost of Sales (1,278.6) (79.7%) (1,394.1) (81.8%) Selling, General & Administrative (215.3) (13.4%) (206.1) (12.1%) ---------- ---------- ---------- ---------- Operating Earnings $ 111.3 6.9% $ 104.0 6.1% ========== ========== ========== ========== Units Closed 8,709 9,835 % Change (11.4%) 15.4% Unit Sales Price $ 181,716 $ 169,845 % Change 7.0% 4.2% Operating Earnings per Unit $ 12,775 $ 10,577 % Change 20.8% 25.9%
-11- 15 Home closings for the quarter were 3,025 units, 6% less than 3,226 for the same quarter last year. Home sales (orders) were 2,591 for the quarter this year, compared to 2,567 units for the same quarter a year ago. Home closings for the nine months this year totaled 8,709 units, 11% less than closings of 9,835 units for the same period a year ago. Unit orders for the current nine months were 8,824, 6% higher than 8,319 units for the same period last year. The backlog of homes sold but not closed at December 31, 1997 was 4,423 units, 10% higher than 4,017 units at December 31, 1996. Centex is currently operating slightly fewer neighborhoods than it did a year ago. The operating earnings for the quarter and nine months ended December 31, 1997 increased as a percentage of revenue and on a per unit basis compared to the same periods last year primarily as a result of Centex Homes' continuing focus on improved efficiency throughout its operations. Manufactured Housing The following summarizes Manufactured Housing's results for the quarter and fiscal year-to-date ended December 31, 1997 (dollars in millions):
Fiscal Quarter Ended Year-to-Date 12/31/97 12/31/97 -------------------- -------------------- Manufactured Housing Revenues $ 38,239 100.0% $ 103,727 100.0% Cost of Sales (30,967) (81.0%) (83,387) (80.4%) Selling, General & Administrative (3,228) (8.4%) (10,094) (9.7%) --------- ----- --------- ----- Earnings Before Goodwill and Minority Interest 4,044 10.6% 10,246 9.9% ===== ===== Goodwill Amortization (573) (1,719) Minority Interest (742) (2,042) --------- --------- Operating Earnings $ 2,729 $ 6,485 ========= ========= Units Produced 1,601 4,219 ========= =========
The Manufactured Housing operation was acquired in late March 1997. Accordingly, there is no comparative data for the quarter and fiscal year-to-date ended December 31, 1996. INVESTMENT REAL ESTATE For the quarter ended December 31, 1997, Centex's Investment Real Estate operation, through which all investment property transactions are reported, had operating earnings of $7.1 million, 27% higher than $5.6 million last year. For the current nine months, operating earnings from Investment Real Estate were $21.8 million, a 71% improvement over operating earnings of $12.8 million for the same period in the prior year. -12- 16 FINANCIAL SERVICES The following summarizes Financial Services' results for the quarter and fiscal year-to-date ended December 31, 1997 compared to the quarter and fiscal year-to-date ended December 31, 1996 (dollars in millions):
Fiscal Fiscal Quarter Ended Quarter Ended Year-to-date Year-to-date 12/31/97 12/31/96 12/31/97 12/31/96 ------------- ------------- ------------- ------------- Revenues $ 64.6 $ 38.2 $ 169.1 $ 117.1 ------------- ------------- ------------- ------------- Operating Earnings $ 8.5 $ 7.2 $ 21.3 $ 19.4 ------------- ------------- ------------- ------------- Origination Volume $ 1,744 $ 1,316 $ 4,836 $ 4,100 ------------- ------------- ------------- ------------- Number of Loans Originated CTX Mortgage - Centex-built Homes ("Builder") 2,127 2,275 6,085 7,220 Non-Centex-built Homes ("Retail") 10,426 7,931 30,258 26,155 ------------- ------------- ------------- ------------- 12,553 10,206 36,343 33,375 Centex Home Equity 2,341 1,507 5,161 2,434 ------------- ------------- ------------- ------------- 14,894 11,713 41,504 35,809 ============= ============= ============= =============
CTX Mortgage Company's (CTX) builder applications for the quarter of 2,000 increased 26% over last year while Retail applications rose 45% to 10,025. Builder applications of 6,544 for the nine month period were 10% higher than a year ago. Retail applications increased 24% from 24,771 a year ago to 30,626 for the nine months. CTX's profit per loan of $841 for this year's quarter was a 36% improvement over the per loan profit of $620 for last year's quarter as a result of increased originations and the centralization of certain back-office functions. Centex Home Equity Corporation (CHEC) generated 7,645 "B & C" loan applications for the quarter, an increase of 32% compared to the same quarter a year ago. CHEC applications for the nine months rose 47% to 16,283. Operating earnings for the quarter reflect continuing start-up costs of approximately $2 million for CHEC and the recently formed Centex Finance Company. CONSTRUCTION PRODUCTS Revenues from CXP were $70.5 million for the quarter this year, 19% higher than last year. CXP's operating earnings, net of minority interest, were $11.2 million for the quarter this year, 27% higher than last year's earnings. CXP's revenues for the current nine months were $231.9 million, 25% higher than last year. CXP's operating earnings, net of minority interest, were a record $38.6 million, a 45% improvement over results for the same period a year ago. CXP's record results were due to higher product sales volumes, particularly the increased gypsum wallboard sales related to the acquisition of the Eagle Gypsum plant in late fiscal 1997. CXP's earnings also were favorably impacted by continued strong product demand and higher average cement and gypsum wallboard pricing. -13- 17 CONTRACTING AND CONSTRUCTION SERVICES The following summarizes Contracting and Construction Services' results for the quarter and fiscal year-to-date ended December 31, 1997 compared to the quarter and fiscal year-to-date ended December 31, 1996 (dollars in millions):
Fiscal Fiscal Quarter Ended Quarter Ended Year-to-Date Year-to-Date 12/31/97 12/31/96 12/31/97 12/31/96 ------------- ------------- ------------- ------------- Revenues $ 246.2 $ 270.3 $ 708.1 $ 819.3 ------------- ------------- ------------- ------------- Operating Earnings (Loss) $ 2.5 $ (3.0) $ 4.7 $ (2.7) ------------- ------------- ------------- ------------- New Contracts Received $ 122 $ 334 $ 613 $ 831 ------------- ------------- ------------- ------------- Backlog of Uncompleted Contracts $ 1,019 $ 1,213 $ 1,019 $ 1,213 ------------- ------------- ------------- -------------
Although Contracting and Construction Services continues to operate in an intensely competitive environment, nonresidential construction is improving as the economy strengthens and profit margins on contracts recently acquired by the group continue to improve. During the current and prior fiscal years, the Contracting and Construction Services operation has provided a positive average net cash flow in excess of Centex's investment in the group of approximately $55-60 million. In October 1992 Martin County sued one of the Company's general contracting subsidiaries, Centex-Rooney Construction Co., Inc. ("Rooney"), alleging defects in the design and construction of the Martin County Courthouse in Stuart, Florida. Rooney was construction manager of the project. In July 1996 a judgment of $14.2 million was returned against Rooney, and in April 1997 Martin County also obtained a judgment of $3.2 million in attorney's fees and costs. Both judgments, together with interest, currently approach $20 million. Recently, the 4th District Court of Appeals affirmed the $14.2 million judgment and Rooney is now preparing a motion for re-hearing and an appeal to the Supreme Court of Florida. Rooney's appeal of the $3.2 million award is still pending. At this time, Rooney is prosecuting claims and lawsuits against sub-contractors, their insurance carriers and Rooney's own insurance carriers for recovery of the judgments. One of Rooney's carriers has agreed to pay approximately $3.5 million. While there is no assurance that Rooney's appeal will be successful or that it will recover from such sub-contractors or other insurance carriers, management believes that Rooney will be able to recover substantially all of both judgments. In any case, these judgments would not have a material impact on the financial condition of the Company. FINANCIAL CONDITION AND LIQUIDITY Centex fulfills its short-term financing requirements with cash generated from its operations and funds available under its credit facilities. These credit facilities also serve as back-up lines for overnight borrowings under its uncommitted bank facilities and commercial paper program. In addition, CTX Mortgage Company has its own $700 million of committed credit facilities and approximately $600 million of uncommitted facilities to finance mortgages which are held during the period they are being securitized and readied for delivery against forward sale commitments. The $312.7 million increase in debt was primarily used to fund the increase in both residential mortgage loans and inventories. The increase in residential mortgage loans is primarily due to an increase in mortgage refinancing activity which is attributed to continuing favorable mortgage interest rates. The Company believes it has adequate resources and sufficient credit facilities to satisfy its current needs and provide for future growth. -14- 18 OTHER DEVELOPMENTS AND OUTLOOK During the quarter, Centex's Board of Directors authorized a two-for-one split of its common stock subject to certain conditions, including stockholder approval of an amendment to Centex Corporation's Restated Articles of Incorporation that will double the number of authorized shares from 50 to 100 million. Stockholders approved the amendment at a special meeting of the Centex stockholders on February 4, 1998. The split will be effected by the issuance of one additional share of stock for each share outstanding on the record date, which will be February 13, 1998. Distribution of the additional shares will occur on February 27, 1998. Following the stock split, the Company's current quarterly dividend of 7 cents per share will be increased to 4 cents on each of the new shares, resulting in a 14% gain in the post split quarterly dividend. Also during the quarter, Centex Financial Services formed Centex Finance Company, a Phoenix, Arizona-based operation providing lending services to customers of manufactured housing dealers. The new entity initiated operations in Arizona in order to take advantage of the dealer network serving Cavco Industries, Centex's manufactured housing company. Centex Finance Company will also target additional dealerships in Arizona and is adding representatives in other states. Favorable interest rates and the strong national economy in recent months have positively affected the Company's businesses. If interest rates and general economic conditions remain at or near current levels, Centex's Home Building results will exceed fiscal 1997's record performance. Centex's other businesses also should continue to report improved results, including CXP which is on track to have its fourth consecutive year of record earnings. As a result, Centex's fiscal 1998 financial results should surpass fiscal 1997's all-time-high earnings. ---------------------------------------- The information contained in this report includes forward looking statements involving a number of risks and uncertainties. In addition to the factors discussed, other determinants that could cause actual results to differ include: increases in interest rates; business conditions; growth in the home building, investment real estate, financial services, contracting and construction services, and construction products industries and the economy in general; competitive factors; and the cost of building materials. These and other factors are described in the Joint Annual Report on Form 10-K of Centex Corporation and 3333 Holding Corporation and Centex Development Company, L.P., and in the Annual Report on Form 10-K for Centex Construction Products, Inc., for the fiscal year ended March 31, 1997. Both reports are filed with the Securities and Exchange Commission. -15- 19 CENTEX CORPORATION PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibit 27 - Financial Data Schedule (b) Reports on Form 8-K The Registrant filed no reports on Form 8-K during the quarter ended December 31, 1997. All other items required under Part II are omitted because they are not applicable. -16- 20 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CENTEX CORPORATION ------------------------------ Registrant February 12, 1998 /s/ David W. Quinn ------------------------------ David W. Quinn Vice Chairman and Chief Financial Officer (principal financial officer) February 12, 1998 /s/ Barry G. Wilson ------------------------------ Barry G. Wilson Controller (chief accounting officer) -17- 21 This page intentionally left blank -18- 22 3333 HOLDING CORPORATION CENTEX DEVELOPMENT COMPANY, L.P. PART I. FINANCIAL INFORMATION CONDENSED COMBINING FINANCIAL STATEMENTS ITEM 1. The condensed combining financial statements include the accounts of 3333 Holding Corporation and subsidiary and Centex Development Company, L.P. (collectively the "Companies"), and have been prepared by the Companies, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Companies believe that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed combining financial statements be read in conjunction with the financial statements and the notes thereto included in the Companies' latest annual report on Form 10-K. In the opinion of the Companies, all adjustments necessary to present fairly the information in the following condensed financial statements of the Companies have been included. The results of operations for such interim periods are not necessarily indicative of the results for the full year. -19- 23 3333 HOLDING CORPORATION AND SUBSIDIARY AND CENTEX DEVELOPMENT COMPANY, L.P. CONDENSED COMBINING STATEMENT OF OPERATIONS (dollars in thousands, except per share/unit data) (unaudited)
For the Three Months Ended December 31, ---------------------------------------------------------------------------------------- 1997 1996 ------------------------------------------ ------------------------------------------ 3333 HOLDING 3333 HOLDING CENTEX CORPORATION CENTEX CORPORATION DEVELOPMENT AND DEVELOPMENT AND COMBINED COMPANY, L.P. SUBSIDIARY COMBINED COMPANY, L.P. SUBSIDIARY ------------ ------------- ------------ ------------ ------------- ------------ Revenues $ 9,228 $ 9,123 $ 310 $ 4,026 $ 3,932 $ 307 Costs and Expenses 6,194 6,069 330 3,382 3,224 371 ------------ ------------ ------------ ------------ ------------ ------------ Earnings (Loss) Before Income Taxes 3,034 3,054 (20) 644 708 (64) Income Taxes -- -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ NET EARNINGS (LOSS) $ 3,034 $ 3,054 $ (20) $ 644 $ 708 $ (64) ============ ============ ============ ============ ============ ============ EARNINGS (LOSS) PER SHARE/UNIT (Average Outstanding Shares, 1,000; Units, 1,000) $ 3,054 $ (20) $ 708 $ (64) ============ ============ ============ ============
See notes to condensed combining financial statements. -20- 24 3333 HOLDING CORPORATION AND SUBSIDIARY AND CENTEX DEVELOPMENT COMPANY, L.P. CONDENSED COMBINING STATEMENT OF OPERATIONS (dollars in thousands, except per share/unit data) (unaudited)
For the Nine Months Ended December 31, ---------------------------------------------------------------------------------------- 1997 1996 ------------------------------------------ ------------------------------------------ 3333 HOLDING 3333 HOLDING CENTEX CORPORATION CENTEX CORPORATION DEVELOPMENT AND DEVELOPMENT AND COMBINED COMPANY, L.P. SUBSIDIARY COMBINED COMPANY, L.P. SUBSIDIARY ------------ ------------- ------------ ------------ ------------- ------------ Revenues $ 16,063 $ 15,748 $ 1,059 $ 8,323 $ 7,945 $ 1,331 Costs and Expenses 11,890 11,635 999 7,414 7,251 1,116 ------------ ------------- ------------ ------------ ------------- ------------ Earnings Before Income Taxes 4,173 4,113 60 909 694 215 Income Taxes -- -- -- -- -- -- ------------ ------------- ------------ ------------ ------------- ------------ NET EARNINGS $ 4,173 $ 4,113 $ 60 $ 909 $ 694 $ 215 ============ ============= ============ ============ ============= ============ EARNINGS PER SHARE/UNIT (Average Outstanding Shares, 1,000; Units, 1,000) $ 4,113 $ 60 $ 694 $ 215 ============= ============ ============= ============
See notes to condensed combining financial statements. -21- 25 3333 HOLDING CORPORATION AND SUBSIDIARY AND CENTEX DEVELOPMENT COMPANY, L.P. CONDENSED COMBINING BALANCE SHEETS (dollars in thousands)
December 31, 1997* March 31, 1997** ------------------------------------------ ------------------------------------------ 3333 HOLDING 3333 HOLDING CENTEX CORPORATION CENTEX CORPORATION DEVELOPMENT AND DEVELOPMENT AND COMBINED COMPANY, L.P. SUBSIDIARY COMBINED COMPANY, L.P. SUBSIDIARY ------------ ------------- ------------ ------------ ------------- ------------ ASSETS Cash $ 592 $ 585 $ 7 $ 630 $ 625 $ 5 Accounts Receivable 321 4,560 184 312 868 176 Notes Receivable - Centex Corporation and Subsidiaries 7,700 -- 7,700 7,700 -- 7,700 Other 8,241 8,241 -- 2,365 2,365 -- Investment in Affiliate -- -- 767 -- -- 767 Investment in Real Estate Joint Venture 69 69 -- 202 202 -- Projects Held for Development & Sale 35,479 35,479 -- 38,918 38,918 -- Other Assets 100 100 -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ $ 52,502 $ 49,034 $ 8,658 $ 50,127 $ 42,978 $ 8,648 ============ ============ ============ ============ ============ ============ LIABILITIES, STOCKHOLDERS' EQUITY AND PARTNERS' CAPITAL Accounts Payable and Accrued Liabilities $ 4,311 $ 4,102 $ 4,632 $ 2,648 $ 2,410 $ 970 Notes Payable - Centex Corporation and Subsidiaries 3,288 -- 3,288 7,000 -- 7,000 Other 11,806 11,806 -- 7,055 7,055 -- Land Sale Deposits 10 10 -- 10 10 -- ------------ ------------ ------------ ------------ ------------ ------------ Total Liabilities 19,415 15,918 7,920 16,713 9,475 7,970 Stockholders' Equity and Partners' Capital 33,087 33,116 738 33,414 33,503 678 ------------ ------------ ------------ ------------ ------------ ------------ $ 52,502 $ 49,034 $ 8,658 $ 50,127 $ 42,978 $ 8,648 ============ ============ ============ ============ ============ ============
* Unaudited ** Condensed from audited financial statements. See notes to condensed combining financial statements. -22- 26 3333 HOLDING CORPORATION AND SUBSIDIARY AND CENTEX DEVELOPMENT COMPANY, L.P. CONDENSED COMBINING STATEMENT OF CASH FLOWS (dollars in thousands) (unaudited)
For the Nine Months Ended December 31, ---------------------------------------------------------------------------------- 1997 1996 ---------------------------------------- ---------------------------------------- 3333 HOLDING 3333 HOLDING CENTEX CORPORATION CENTEX CORPORATION DEVELOPMENT AND DEVELOPMENT AND COMBINED COMPANY, L.P. SUBSIDIARY COMBINED COMPANY, L.P. SUBSIDIARY ----------- ------------- ------------ ----------- ------------- ------------ CASH FLOWS - OPERATING ACTIVITIES Net Earnings $ 4,173 $ 4,113 $ 60 $ 909 $ 694 $ 215 Net Change in Payables, Accruals, Deposits and Receivables 1,655 (1,999) 3,654 (309) (95) (214) (Increase) Decrease in Notes Receivable (5,877) (5,877) -- 1,439 1,439 -- Decrease (Increase) in Advances to Joint Venture 133 133 -- (101) (101) -- Decrease in Projects Held for Development and Sale 3,439 3,439 -- 4,891 4,891 -- Increase in Other Assets (100) (100) -- (3,000) (3,000) -- ----------- ----------- ----------- ----------- ----------- ----------- 3,423 (291) 3,714 3,829 3,828 1 ----------- ----------- ----------- ----------- ----------- ----------- CASH FLOWS - FINANCING ACTIVITIES (Decrease) Increase in Notes Payable - Centex Corporation and Subsidiaries (3,712) -- (3,712) -- -- -- Other 4,751 4,751 -- (1,373) (1,373) -- Capital Distributions (4,500) (4,500) -- (2,000) (2,000) -- ----------- ----------- ----------- ----------- ----------- ----------- (3,461) 251 (3,712) (3,373) (3,373) -- ----------- ----------- ----------- ----------- ----------- ----------- NET (DECREASE) INCREASE IN CASH (38) (40) 2 456 455 1 CASH AT BEGINNING OF YEAR 630 625 5 231 225 6 ----------- ----------- ----------- ----------- ----------- ----------- CASH AT END OF PERIOD $ 592 $ 585 $ 7 $ 687 $ 680 $ 7 =========== =========== =========== =========== =========== ===========
See notes to condensed combining financial statements. -23- 27 3333 HOLDING CORPORATION AND SUBSIDIARY AND CENTEX DEVELOPMENT COMPANY, L.P. NOTES TO CONDENSED COMBINING FINANCIAL STATEMENTS DECEMBER 31, 1997 (unaudited) (A) On November 30, 1987 Centex Corporation ("Centex") distributed to a nominee all of the issued and outstanding shares of common stock of 3333 Holding Corporation ("Holding") and warrants to purchase approximately 80% of the Class B units of limited partnership interest in Centex Development Company, L.P. (the "Partnership"). 3333 Development Corporation ("Development"), a wholly-owned subsidiary of Holding, serves as general partner of the Partnership. These securities are held by the nominee on behalf of Centex stockholders and will trade in tandem with the common stock of Centex until such time as they are detached. (B) See Note B to the condensed consolidated financial statements of Centex Corporation and subsidiaries included elsewhere in this Form 10-Q for supplementary condensed combined financial statements for Centex Corporation and Subsidiaries, Holding and subsidiary and the Partnership. (C) The Partnership sells lots to Centex Homes pursuant to certain purchase and sale agreements. Revenues from these sales totaled $220,000 and $855,000 for the quarter and nine months ended December 31, 1997 and $113,000 and $3,090,000 for the quarter and nine months ended December 31, 1996, respectively. Additionally, during the nine months ended December 31, 1997, the Partnership sold property located in Carrollton, Texas to Centex Homes for $2,866,000. (D) A summary of changes in stockholders' equity and partners' capital is presented below (dollars in thousands).
For the Nine Months Ended December 31, 1997 ------------------------------------------------------------------------------------------------- 3333 Holding Corporation Centex Development Company, L.P. and Subsidiary ---------------------------------------- ---------------------------------------- CLASS B GENERAL LIMITED CAPITAL IN UNITS PARTNERS' PARTNERS' STOCK EXCESS OF RETAINED COMBINED WARRANTS CAPITAL CAPITAL WARRANTS PAR VALUE EARNINGS ---------- ---------- ---------- ---------- ---------- ---------- ---------- Balance at March 31, 1997 $ 33,414 $ 500 $ 767 $ 32,236 $ 1 $ 800 $ (123) Preference Payments (4,500) -- -- (4,500) -- -- -- Net Earnings 4,173 -- -- 4,113 -- -- 60 ---------- ---------- ---------- ---------- ---------- ---------- ---------- BALANCE AT DECEMBER 31, 1997 $ 33,087 $ 500 $ 767 $ 31,849 $ 1 $ 800 $ (63) ========== ========== ========== ========== ========== ========== ==========
The Partnership agreement provides that Class A limited partners are entitled to a cumulative preferred return of 9% per annum on their unrecovered capital. Unrecovered capital represents initial capital contributions as reduced by repayments and is the basis for preference accruals. During the nine months ended December 31, 1997, the Partnership made preference payments to its limited partner, which is a Centex affiliate, totaling $4.5 million. No preference payments were made during the quarter. Preference in arrears at December 31, 1997 amounted to $3.4 million and unrecovered capital totaled $32.8 million. -24- 28 3333 HOLDING CORPORATION AND SUBSIDIARY AND CENTEX DEVELOPMENT COMPANY, L.P. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS On a combined basis, revenues for the quarter and nine months ended December 31, 1997 of $9.2 million and $16.1 million, respectively, included the sale of commercial property in Texas, and residential property in Texas and Florida. Revenues of $4.0 million and $8.3 million for the quarter and nine months ended December 31, 1996, respectively, included the sale of commercial property in Texas and residential property in Illinois and New Jersey. The quarter ended December 31, 1997 resulted in combined net earnings of $3.0 million compared to net earnings of $644,000 for the same quarter last year. The nine months ended December 31, 1997 resulted in combined net earnings of $4.2 million compared to $909,000 for the same period last year. The increase in earnings during the current year period reflects the continued improvement in the north Texas real estate market. This improvement has been evidenced by both higher margins on land sales and increased sales activity. LIQUIDITY AND CAPITAL RESOURCES Cash generated from sales and the principal collection on notes receivable during the nine months ended December 31, 1997 was sufficient to allow for the Partnership to make preference payments to its limited partner totaling $4.5 million. Holding, Development and the Partnership believe that they will be able to provide or obtain the necessary funding for their current operations and future expansion needs. The revenues, earnings and liquidity of these companies are largely dependent on future land sales, the timing of which is uncertain. The ability to obtain external debt or equity capital is subject to the provisions of Holding's loan agreement with Centex and the Partnership Agreement governing the Partnership. -25- 29 3333 HOLDING CORPORATION CENTEX DEVELOPMENT COMPANY, L.P. PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibit 27.1 - Financial Data Schedule Exhibit 27.2 - Financial Data Schedule (b) Reports on Form 8-K The Registrant filed no reports on Form 8-K during the quarter ended December 31, 1997. All other items required under Part II are omitted because they are not applicable. -26- 30 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. 3333 HOLDING CORPORATION --------------------------------- Registrant February 12, 1998 /s/ J. Stephen Bilheimer --------------------------------- J. Stephen Bilheimer President February 12, 1998 /s/ Kimberly Pinson --------------------------------- Kimberly Pinson Vice President and Treasurer (chief accounting officer) -27- 31 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CENTEX DEVELOPMENT COMPANY, L.P. ------------------------------------- Registrant By: 3333 Development Corporation, General Partner February 12, 1998 /s/ J. Stephen Bilheimer ------------------------------------- J. Stephen Bilheimer President February 12, 1998 /s/ Kimberly Pinson ------------------------------------- Kimberly Pinson Vice President and Treasurer (chief accounting officer) -28- 32 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION - ------ ----------- 27 Financial Data Schedule 27.1 Financial Data Schedule 27.2 Financial Data Schedule
EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CENTEX CORPORATION'S DECEMBER 31, 1997, FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL INFORMATION. 0000018532 CENTEX CORPORATION 1,000 9-MOS MAR-31-1998 APR-01-1997 DEC-31-1997 89,499 0 1,172,403 0 1,152,879 0 517,632 215,471 3,059,159 0 240,183 0 0 7,423 939,978 3,059,159 2,836,204 2,836,204 2,601,728 2,601,728 49,621 0 24,818 160,037 59,256 100,781 0 0 0 100,781 3.42 3.30
EX-27.1 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 3333 HOLDING CORPORATION'S DECEMBER 31, 1997, FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000818762 3333 HOLDING CORPORATION 1,000 9-MOS MAR-31-1998 APR-01-1997 DEC-31-1997 7 0 7,884 0 0 0 0 0 8,658 0 0 0 0 1 737 8,658 1,059 1,059 999 999 0 0 0 60 0 60 0 0 0 60 0.00 0.00
EX-27.2 4 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CENTEX DEVELOPMENT COMPANY, L.P.'S DECEMBER 31, 1997, FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000818764 CENTEX DEVELOPMENT COMPANY, L.P. 1,000 9-MOS MAR-31-1998 APR-01-1997 DEC-31-1997 585 0 12,801 0 35,479 0 0 0 49,034 0 0 0 0 500 32,616 49,034 15,748 15,748 11,635 11,635 0 0 0 4,113 0 4,113 0 0 0 4,113 0.00 0.00
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