-----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, DSKHkmtRj6LmMljXqmawIeGfepE+LB+2eSq4Brt07M6BkYGqlZ+QZA8Yr2cKalZV IXSl0onyxPEC30fGCvCLLQ== 0000950134-97-006064.txt : 19970814 0000950134-97-006064.hdr.sgml : 19970814 ACCESSION NUMBER: 0000950134-97-006064 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970813 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: 1934 Act SEC FILE NUMBER: 001-06776 FILM NUMBER: 97658822 BUSINESS ADDRESS: STREET 1: 3333 LEE PARKWAY SUITE 1200 CITY: DALLAS STATE: TX ZIP: 75219 BUSINESS PHONE: 2145596500 MAIL ADDRESS: STREET 1: PO BOX 19000 STREET 2: PO BOX 19000 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: 1934 Act SEC FILE NUMBER: 001-09624 FILM NUMBER: 97658823 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: 1934 Act SEC FILE NUMBER: 001-09625 FILM NUMBER: 97658824 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 JUNE 30, 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 JUNE 30, 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 August 8, 1997, 29,595,654 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 JUNE 30, 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 June 30, 1997 2 Condensed Consolidated Balance Sheets 3 Condensed Consolidated Statement of Cash Flows for the Three Months Ended June 30, 1997 4 Notes to Condensed Consolidated Financial Statements 5-8 ITEM 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 9-13 PART II. OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K 14 SIGNATURES 15
-i- 3 3333 HOLDING CORPORATION CENTEX DEVELOPMENT COMPANY, L.P. PAGE PART I. FINANCIAL INFORMATION ITEM 1. Condensed Combining Financial Statements 16 Condensed Combining Statement of Operations for the Three Months Ended June 30, 1997 17 Condensed Combining Balance Sheets 18 Condensed Combining Statement of Cash Flows for the Three Months Ended June 30, 1997 19 Notes to Condensed Combining Financial Statements 20 ITEM 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 21 PART II. OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K 22 SIGNATURES 23-24
-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 June 30, ------------------------------------------ 1997 1996 ---------------- ----------------- REVENUES Home Building Housing $ 460,846 $ 529,821 Manufactured Housing 31,894 - Investment Real Estate 6,780 1,375 Financial Services 47,243 37,931 Construction Products 77,954 61,058 Contracting and Construction Services 236,658 262,226 ---------------- ----------------- 861,375 892,411 ---------------- ----------------- COSTS AND EXPENSES Home Building Housing 433,386 500,736 Manufactured Housing 29,678 - Investment Real Estate (1,369) (2,448) Financial Services 42,038 31,830 Construction Products 54,548 45,860 Contracting and Construction Services 235,647 261,723 Other, net 1,349 129 Corporate General and Administrative 4,360 4,049 Interest Expense 7,806 9,582 Minority Interest 11,513 7,599 ---------------- ----------------- 818,956 859,060 ---------------- ----------------- EARNINGS BEFORE INCOME TAXES 42,419 33,351 Income Taxes 15,409 11,532 ---------------- ----------------- NET EARNINGS $ 27,010 $ 21,819 ================ ================= EARNINGS PER SHARE $ 0.90 $ 0.75 ================ ================= AVERAGE SHARES OUTSTANDING 29,865,876 29,191,955 ================ ================= CASH DIVIDENDS PER SHARE $ 0.05 $ 0.05 ================ =================
See notes to condensed consolidated financial statements. -2- 6 CENTEX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in thousands)
Centex Corporation and Subsidiaries Centex Corporation Financial Services --------------------------- --------------------------- ------------------------ June 30, March 31, June 30, March 31, June 30, March 31, 1997* 1997** 1997* 1997** 1997* 1997** ---------- ----------- ----------- ----------- ---------- --------- ASSETS Cash and Cash Equivalents $ 42,202 $ 31,320 $ 30,132 $ 21,679 $ 12,070 $ 9,641 Receivables - Residential Mortgage Loans 682,617 632,657 - - 682,617 632,657 Other 359,317 354,728 331,781 331,091 27,536 23,637 Affiliates - - - - 6,604 (19,985) Inventories 1,086,299 1,001,759 1,086,299 1,001,759 - - Investments - Centex Development Company, L.P. 30,749 32,664 30,749 32,664 - - Joint Ventures and Other 7,043 5,277 7,043 5,277 - - Unconsolidated Subsidiaries - - 41,811 68,171 - - Property and Equipment, net 297,544 293,143 280,203 276,627 17,341 16,516 Other Assets - Deferred Income Taxes 191,560 197,413 192,869 195,983 (1,309) 1,430 Goodwill, net 108,508 103,622 96,583 91,442 11,925 12,180 Deferred Charges and Other 30,987 26,246 21,347 18,233 9,640 8,013 ---------- ----------- ----------- ----------- ---------- --------- $2,836,826 $ 2,678,829 $ 2,118,817 $ 2,042,926 $ 766,424 $ 684,089 ========== =========== =========== =========== ========== ========= LIABILITIES AND STOCKHOLDERS' EQUITY Accounts Payable and Accrued Liabilities $ 679,016 $ 737,698 $ 624,614 $ 685,050 $ 54,402 $ 52,648 Short-term Debt 820,855 627,518 160,000 47,000 660,855 580,518 Long-term Debt 240,530 236,769 240,530 236,769 - - Minority Stockholders' Interest 134,646 142,230 131,894 139,493 2,752 2,737 Negative Goodwill 94,837 98,837 94,837 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 29,331,960 and 29,016,089 respectively 7,320 7,254 7,320 7,254 1 1 Capital in Excess of Par Value 24,337 18,789 24,337 18,789 44,075 44,075 Retained Earnings 835,285 809,734 835,285 809,734 4,339 4,110 ---------- ----------- ----------- ----------- ---------- --------- Total Stockholders' Equity 866,942 835,777 866,942 835,777 48,415 48,186 ---------- ----------- ----------- ----------- ---------- --------- $2,836,826 $ 2,678,829 $ 2,118,817 $ 2,042,926 $ 766,424 $ 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 (CTX Mortgage and Affiliates). Transactions between Centex Corporation and Financial Services have been eliminated from the Centex Corporation and Subsidiaries balance sheets. -3- 7 CENTEX CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (dollars in thousands) (unaudited)
For the Three Months Ended June 30, --------------------------------------- 1997 1996 ----------------- ---------------- CASH FLOWS - OPERATING ACTIVITIES Net Earnings $ 27,010 $ 21,819 Adjustments - Depreciation and Amortization 5,633 3,093 Deferred Income Taxes 8,574 8,644 Equity in Earnings of CDC and Joint Ventures (666) (503) Minority Interests in Earnings of Subsidiaries 11,513 7,599 Increase in Receivables (4,589) (7,969) (Increase) Decrease in Residential Mortgage Loans (49,960) 62,573 Increase in Inventories (84,540) (15,355) Decrease in Payables and Accruals (58,682) (14,910) Increase in Other Assets (14,128) (24,588) Other, net (19,097) 9,071 ----------------- ---------------- (178,932) 49,474 ----------------- ---------------- CASH FLOWS - INVESTING ACTIVITIES Decrease in Advances to CDC and Joint Ventures 815 2,069 (Increase) Decrease in Property and Equipment, net (12,254) 2,283 ----------------- ---------------- (11,439) 4,352 ----------------- ---------------- CASH FLOWS - FINANCING ACTIVITIES Increase (Decrease) in Debt 197,098 (31,935) Proceeds from Stock Option Exercises 5,614 1,558 Dividends Paid (1,459) (1,425) ----------------- ---------------- 201,253 (31,802) ----------------- ---------------- NET INCREASE IN CASH 10,882 22,024 CASH AT BEGINNING OF PERIOD 31,320 14,042 ----------------- ---------------- CASH AT END OF PERIOD $ 42,202 $ 36,066 ================= ================
See notes to condensed consolidated financial statements. -4- 8 CENTEX CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 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 - - - 27,010 27,010 Exercise of Stock Options - 66 5,548 - 5,614 Cash Dividends - - - (1,459) (1,459) ----------- ---------- ----------- ------------ ------------ BALANCE, JUNE 30, 1997 $ - $ 7,320 $ 24,337 $ 835,285 $ 866,942 =========== ========== =========== ============ ============
(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. 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: -5- 9 NOTES - continued CENTEX CORPORATION, 3333 HOLDING CORPORATION AND SUBSIDIARY AND CENTEX DEVELOPMENT COMPANY, L. P. SUPPLEMENTARY CONDENSED COMBINED BALANCE SHEETS (dollars in thousands)
June 30, March 31, 1997 1997 * ---------------- ---------------- ASSETS Cash and Cash Equivalents $ 43,485 $ 31,950 Receivables 1,043,770 989,886 Inventories 1,124,293 1,041,855 Investments - Joint Ventures and Other 7,226 5,479 Property and Equipment, net 297,544 293,143 Other Assets 331,165 327,281 ---------------- ---------------- $ 2,847,483 $ 2,689,594 ================ ================ LIABILITIES AND STOCKHOLDERS' EQUITY Accounts Payable and Accrued Liabilities $ 681,903 $ 740,230 Short-term Debt 827,355 634,573 Long-term Debt 240,530 236,769 Minority Stockholders' Interest 134,646 142,230 Negative Goodwill 94,837 98,837 Stockholders' Equity 868,212 836,955 ---------------- ---------------- $ 2,847,483 $ 2,689,594 ================ ================
*Condensed from audited financial statements. SUPPLEMENTARY CONDENSED COMBINED STATEMENT OF EARNINGS (dollars in thousands)
For the Three Months Ended June 30, ----------------------------------------- 1997 1996 ---------------- ---------------- Revenues $ 864,183 $ 892,583 Costs and Expenses 821,672 859,052 ---------------- ---------------- Earnings Before Income Taxes 42,511 33,531 Income Taxes 15,409 11,532 ---------------- ---------------- NET EARNINGS $ 27,102 $ 21,999 ================ ================
-6- 10 Notes - continued (C) In order to assure the future availability of land for its Home Building operation, the Company has made deposits totaling $17 million as of June 30, 1997 for options to purchase undeveloped land and developed lots having a total purchase price of approximately $387 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 $18 million. In addition, the Company has executed lot purchase contracts with CDC which aggregate approximately $9 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.
Three Months Ended --------------------------- 6/30/97 6/30/96 ------- ------- Total Interest Incurred $17,004 $17,816 Less - Financial Services (9,198) (8,234) ------- ------- Interest Expense $ 7,806 $ 9,582 ======= =======
(E) During the quarter ended June 30, 1994, Centex Construction Products, Inc. (CXP) completed an initial public offering of 51% of its stock and began trading on the New York Stock Exchange under the symbol "CXP". As a result of CXP's repurchase of its own stock during the quarter ended June 30, 1996, Centex's ownership interest in CXP has increased to more than 50% (54.4% as of June 30, 1997). Accordingly, beginning with the quarter ended June 30, 1996, CXP's financial results have been consolidated with those of Centex. (F) During the quarter ended June 30, 1996, Centex's Home Building subsidiary completed a business combination transaction and reorganization with Vista Properties, Inc. that increased Centex's ownership of Vista's common stock from approximately 53% to 99.975%. Under the terms of the combination transaction, Centex's Home Building assets and operations were contributed to Vista in exchange for 12.4 million shares of Vista's common stock and Vista changed its name to Centex Real Estate Corporation. 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. Accordingly, 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 which operates under the Vista Properties Company name. -7- 11 Notes - continued (G) During March, 1997, Centex Real Estate Corporation acquired 78% of Cavco Industries, Inc.'s (Cavco) outstanding common stock at $26.75 per share for a total of $74.3 million. Prior to the acquisition, Cavco's common stock was publicly traded on the NASDAQ National Market. 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. 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. Proforma basic and diluted EPS for the three months ended June 30, 1997 and 1996, assuming that SFAS No. 128 was effective as of the beginning of the year are presented below.
Three Months Ended June 30, -------------------- 1997 1996 ----- ----- Earnings per common share: Basic $0.93 $0.77 Diluted $0.90 $0.74
-8- 12 CENTEX CORPORATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Centex's consolidated revenues for the quarter were $861.4 million, 3% less than $892.4 million for the same quarter last year. Earnings before income taxes were $42.4 million, 27% higher than $33.4 million last year. Net earnings were $27.0 million and earnings per share were $.90 for this quarter compared to $21.8 million and $.75, respectively, for the same quarter last year. HOME BUILDING Housing The following summarizes Housing results for the quarter ended June 30, 1997 compared to the quarter ended June 30, 1996 (dollars in millions, except per unit data):
Quarter Ended Quarter Ended 6/30/97 6/30/96 --------------------------- ------------------------- Housing Revenues $ 460.8 100.0% $ 529.8 100.0% Cost of Sales (368.4) (79.9%) (432.3) (81.6%) Selling, General & Administrative (64.9) (14.1%) (68.4) (12.9%) ----------- ----- ----------- ----- Operating Earnings $ 27.5 6.0% $ 29.1 5.5% =========== ===== =========== ===== Units Closed 2,566 3,095 Unit Sales Price $ 177,469 $ 167,374 % Change 6.0% 4.5% Operating Earnings per Unit $ 10,701 $ 9,397 % Change 13.9% 34.5%
The 14% improvement in the per unit operating margin for the quarter ended June 30, 1997 despite the decline in closings reflects the Company's continuing concentration on improved operating efficiencies. Home closings for the quarter declined to 2,566 units, a 17% decrease over 3,095 units for the same quarter last year. Home sales (orders) declined to 3,099 for the quarter this year, 2% less than 3,153 units for the same quarter a year ago. The backlog of homes sold but not closed at June 30, 1997 was 4,841 units, 13% less than the June 30, 1996 backlog, but 12% higher than the backlog at March 31, 1997. -9- 13 Manufactured Housing The following summarizes Manufactured Housing's results for the quarter ended June 30, 1997 (dollars in millions):
Quarter Ended 6/30/97 --------------------- Manufactured Housing Revenues $ 31,894 100.0% Cost of Sales (26,352) (82.6%) Selling, General & Administrative (2,753) (8.7%) -------- ----- Earnings before Goodwill and Minority Interest 2,789 8.7% Goodwill Amortization (573) ===== -------- Earnings before Minority Interest 2,216 Minority Interest Expense (488) -------- Operating Earnings $ 1,728 ======== Units Produced 1,218 ========
The Manufactured Housing operation was acquired in late March, 1997. Accordingly, there is no comparative data for the quarter ended June 30, 1996. INVESTMENT REAL ESTATE For the quarter ended June 30, 1997, Centex's Investment Real Estate operation, through which all investment property transactions are reported, had operating earnings of $8.1 million versus $3.8 million for the same quarter a year ago. The gain for the current quarter was primarily due to increased land sales. -10- 14 FINANCIAL SERVICES The following summarizes Financial Services' results for the quarter ended June 30, 1997 compared to the quarter ended June 30, 1996 (dollars in millions):
Quarter Ended Quarter Ended 6/30/97 6/30/96 --------- ----------- Revenues $ 47.2 $ 37.9 Operating Earnings $ 5.2 $ 6.1 Origination Volume $ 1,432 $ 1,403 Number of Loans Originated Centex-built Homes ("Builder") 1,772 2,344 Non-Centex-built Homes ("Retail") 9,480 9,499 Home Equity 849 225 --------- ----------- 12,101 12,068 ========= ===========
Builder applications of 2,405 were the same as last year while Retail applications increased 6% to 10,177. The profit per loan for this year's quarter was $493, 19% less than the per loan profit for the same quarter a year ago. Centex Home Equity Corporation (CHEC) applications of 1,177 increased 44% from applications for the same quarter a year ago. CHEC should become profitable in the latter part of fiscal 1998. CONSTRUCTION PRODUCTS CXP's operating earnings, net of minority interest, were $12.3 million for the quarter this year, 61% higher than last year's earnings. Revenues from CXP were $78.0 million for the quarter this year, 28% higher than last year. CXP's record earnings resulted from a strong increase in Gypsum Wallboard operating earnings due to significantly higher pricing and increased volumes related to CXP's acquisition of the Eagle Gypsum wallboard plant in late fiscal 1997. Results from CXP's Cement operation also improved. -11- 15 CONTRACTING AND CONSTRUCTION SERVICES The following summarizes Contracting and Construction Services results for the quarter ended June 30, 1997 compared to the quarter ended June 30, 1996 (dollars in millions):
Quarter Ended Quarter Ended 6/30/97 6/30/96 ----------- ------------ Revenues $ 236.7 $ 262.2 Operating Earnings $ 1.0 $ .5 New Contracts Received $ 188 $ 277 Backlog of Uncompleted Contracts $ 1,066 $ 1,217
The construction sector is improving as the economy strengthens and profit margins on contracts recently acquired by the group continue to improve. The Contracting and Construction Services operation provided a positive average net cash flow in excess of Centex's investment in the group of approximately $58 million during both the current quarter and the same quarter last year. 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 $600 million of committed credit facilities and $485 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 $197.1 million increase in debt was primarily used to fund the increase in both residential mortgage loans and inventories and to reduce payables and accruals. The increase in residential mortgage loans was primarily due to the increase in the Company's new home equity lending business. The Company believes it has adequate resources and sufficient credit facilities to satisfy its current needs and provide for future growth. -12- 16 OTHER DEVELOPMENTS AND OUTLOOK Due to the Company's excellent financial performance, it increased its dividend by 40% to $.28 annually or $.07 per quarter from $.20 annually or $.05 per quarter beginning with the dividend payable in October, 1997. Recent lower interest rates have favorably impacted home sales and mortgage applications. If interest rates remain at or near current levels, the Company's Home Building sales and margins should continue to increase and fiscal 1998 Home Building results could surpass 1997's record levels. Centex also expects improved performances from its other businesses, including Financial Services and Manufactured Housing, as well as positive results from Contracting and Construction Services. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 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, 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. -13- 17 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 June 30, 1997. All other items required under Part II are omitted because they are not applicable. -14- 18 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 August 12, 1997 /s/ JOHN T. EGELAND ---------------------------------------- John T. Egeland Executive Vice President and Chief Financial Officer (principal financial officer) August 12, 1997 /s/ BARRY G. WILSON ---------------------------------------- Barry G. Wilson Controller (chief accounting officer) -15- 19 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. -16- 20 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 JUNE 30, ------------------------------------------------------------------------------------------ 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 $3,741 $3,623 $412 $3,472 $3,322 $ 579 Costs and Expenses 2,950 2,924 320 3,116 3,146 399 ------ ------ ---- ------ ------ ----- Earnings Before Income Taxes 791 699 92 356 176 180 Income Taxes - - - - - - ------ ------ ---- ------ ------ ----- Net Earnings $ 791 $ 699 $ 92 $ 356 $ 176 $ 180 ====== ====== ==== ====== ====== ===== Earnings Per Share/Unit (Average Outstanding Shares, 1,000; Units, 1,000) $ 699 $ 92 $ 176 $ 180 ====== ==== ====== =====
See notes to condensed combining financial statements. -17- 21 3333 HOLDING CORPORATION AND SUBSIDIARY AND CENTEX DEVELOPMENT COMPANY, L.P. CONDENSED COMBINING BALANCE SHEETS (dollars in thousands)
JUNE 30, 1997* MARCH 31, 1997** ------------------------------------ ----------------------------------- 3333 HOLDING CENTEX 333 HOLDING CENTEX CORPORATION DEVELOPMENT CORPORATION DEVELOPMENT AND COMPANY AND COMBINED COMPANY, L.P. SUBSIDIARY COMBINED L.P. SUBSIDIARY -------- ------------- ----------- -------- ----------- ---------- ASSETS Cash $ 1,283 $ 1,277 $ 6 $ 630 $ 625 $ 5 Accounts Receivable 318 540 182 312 868 176 Notes Receivable - Centex Corporation and Subsidiaries 7,700 - 7,700 7,700 - 7,700 Other 1,700 1,700 - 2,365 2,365 - Investment in Affiliate - - 767 - - 767 Investment in Real Estate Joint Venture 183 183 - 202 202 - Projects Held for Development and Sale 36,723 36,723 - 38,918 38,918 - Other Assets 110 110 - - - - ------- ------- ------- ------- ------- ------ $48,017 $40,533 $ 8,655 $50,127 $42,978 $8,648 ======= ======= ======= ======= ======= ====== LIABILITIES, STOCKHOLDERS' EQUITY AND PARTNERS' CAPITAL Accounts Payable and Accrued Liabilities $ 2,987 $ 2,821 $ 570 $ 2,648 $ 2,410 $ 970 Notes Payable - Centex Corporation and Subsidiaries 7,315 - 7,315 7,000 - 7,000 Other 6,500 6,500 - 7,055 7,055 - Land Sale Deposits 10 10 - 10 10 - ------- ------- ------- ------- ------- ------ Total Liabilities 16,812 9,331 7,885 16,713 9,475 7,970 Stockholders' Equity and Partners' Capital 31,205 31,202 770 33,414 33,503 678 ------- ------- ------- ------- ------- ------ $48,017 $40,533 $ 8,655 $50,127 $42,978 $8,648 ======= ======= ======= ======= ======= ======
* Unaudited ** Condensed from audited financial statements. See notes to condensed combining financial statements. -18- 22 3333 HOLDING CORPORATION AND SUBSIDIARY AND CENTEX DEVELOPMENT COMPANY, L.P. CONDENSED COMBINING STATEMENT OF CASH FLOWS (dollars in thousands) (unaudited)
FOR THE THREE MONTHS ENDED JUNE 30, ------------------------------------------------------------------------------------- 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 $ 791 $ 699 $ 92 $ 356 $ 176 $ 180 Net Change in Payables, Accruals, Deposits and Receivables 333 739 (406) 394 (523) 917 Decrease in Notes Receivable 665 665 - 1,028 1,028 - Decrease (Increase) in Advances to Joint Venture 19 19 - (37) (37) - Decrease in Projects Held for Development and Sale 2,195 2,195 - 2,554 2,554 - Increase in Other Assets (110) (110) - - - - ------- ------- ------- ------- ------- ------- 3,893 4,207 (314) 4,295 3,198 1,097 ------- ------- ------- ------- ------- ------- Cash Flows - Financing Activities Increase (Decrease) in Notes Payable - Centex Corporation and Subsidiaries 315 - 315 (1,100) - (1,100) Other (555) (555) - (1,373) (1,373) - Capital Distributions (3,000) (3,000) - (1,500) (1,500) - ------- ------- ------- ------- ------- ------- (3,240) (3,555) 315 (3,973) (2,873) (1,100) ------- ------- ------- ------- ------- ------- Net Increase (Decrease) In Cash 653 652 1 322 325 (3) Cash At Beginning Of Year 630 625 5 231 225 6 ------- ------- ------- ------- ------- ------- Cash At End Of Period $ 1,283 $ 1,277 $ 6 $ 553 $ 550 $ 3 ======= ======= ======= ======= ======= =======
See notes to condensed combining financial statements. -19- 23 3333 HOLDING CORPORATION AND SUBSIDIARY AND CENTEX DEVELOPMENT COMPANY, L.P. NOTES TO CONDENSED COMBINING FINANCIAL STATEMENTS JUNE 30, 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 $594,000 and $2,908,000 for the three months ended June 30, 1997 and 1996, respectively. Additionally, during the three months ended June 30, 1997, the Partnership sold property located in Carrollton, Texas to Centex Homes for $2,866,000. (D) A summary of changes in stockholders' equity is presented below (dollars in thousands).
For the Three Months Ended June 30, 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) Capital Distributions (3,000) - - (3,000) - - - Net Earnings 791 - - 699 - - 92 -------- ------- --------- --------- -------- ---------- --------- BALANCE AT JUNE 30, 1997 $ 31,205 $ 500 $ 767 $ 29,935 $ 1 $ 800 $ (31) ======== ======= ========= ========= ========= ========== =========
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 three months ended June 30, 1997, the Partnership made preference payments totaling $3.0 million to its limited partners, which are Centex affiliates. Preference payments in arrears at June 30, 1997 amounted to $3.6 million and unrecovered capital totaled $32.8 million. -20- 24 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 ended June 30, 1997 of $3.7 million included results from the sale of residential property in Florida and commercial property in Texas. Revenues of $3.5 million for the quarter ended June 30, 1996 included the sale of residential property in Illinois and New Jersey. The quarter ended June 30, 1997 reflected combined net earnings of $791,000, compared to $356,000 for the same quarter last year. The improvement in earnings relates to the higher gross margin on real estate sales for the quarter ended June 30, 1997 compared to the same quarter last year. LIQUIDITY AND CAPITAL RESOURCES Cash generated from sales and the principal collection on notes receivable during the three months ended June 30, 1997 was sufficient to allow for the Partnership to make preference payments totalling $3.0 million to its limited partners, which are Centex affiliates. 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. -21- 25 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 June 30, 1997. All other items required under Part II are omitted because they are not applicable. -22- 26 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 August 12, 1997 /s/ J. STEPHEN BILHEIMER ---------------------------------------- J. Stephen Bilheimer President August 12, 1997 /s/ KIMBERLY PINSON ---------------------------------------- Kimberly Pinson Vice President and Treasurer (chief accounting officer) -23- 27 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 August 12, 1997 /s/ J. STEPHEN BILHEIMER ---------------------------------------- J. Stephen Bilheimer President August 12, 1997 /s/ KIMBERLY PINSON ---------------------------------------- Kimberly Pinson Vice President and Treasurer (chief accounting officer) -24- 28 Index to Exhibits
Exhibit No Description - ---------- ----------- Exhibit 27 Financial Data Schedule Exhibit 27.1 Financial Data Schedule Exhibit 27.2 Financial Data Schedule
EX-27 2 FINANCIAL DATA SCHEDULE-CENTEX CORPORATION
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CENTEX CORPORATION'S JUNE 30, 1997, FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000018532 CENTEX CORPORATION 1,000 3-MOS MAR-31-1998 APR-01-1997 JUN-30-1997 42,202 0 1,041,934 0 1,086,299 0 502,021 204,477 2,836,826 0 240,530 0 0 7,320 859,622 2,836,826 861,375 861,375 795,277 795,277 15,873 0 7,806 42,419 15,409 27,010 0 0 0 27,010 0.90 0.00
EX-27.1 3 FINANCIAL DATA SCHEDULE-3333 HOLDING CORPORATION
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 3333 HOLDING CORPORATION'S JUNE 30, 1997, FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000818762 3333 HOLDING CORPORATION 1,000 3-MOS MAR-31-1998 APR-01-1997 JUN-30-1997 6 0 7,882 0 0 0 0 0 8,655 0 0 0 0 1 769 8,655 412 412 320 320 0 0 0 92 0 92 0 0 0 92 0.00 0.00
EX-27.2 4 FINANCIAL DATA SCHEDULE-CENTEX DEVELOPMENT CO.L.P.
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CENTEX DEVELOPMENT COMPANY L.P.'S JUNE 30, 1997, FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000818764 CENTEX DEVELOPMENT COMPANY, L.P. 1,000 3-MOS MAR-31-1998 APR-01-1997 JUN-30-1997 1,277 0 2,240 0 36,723 0 0 0 40,533 0 0 0 0 500 30,702 40,533 3,623 3,623 2,924 2,924 0 0 0 699 0 699 0 0 0 699 0.00 0.00
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