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
SEPTEMBER 30, 1994
Commission File No. 1-6776
(Centex Logo)
CENTEX CORPORATION
A Nevada Corporation
IRS Employer Identification No. 75-0778259
3333 Lee Parkway, Suite 1200
Dallas, Texas 75219
(214) 559-6500
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
3333 Lee Parkway, Suite 500
Dallas, Texas 75219
(214) 559-6700
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 November 9, 1994, 28,950,825 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
SEPTEMBER 30, 1994
CENTEX CORPORATION
PAGE
PART I. FINANCIAL INFORMATION
ITEM 1. Condensed Consolidated Financial Statements 1
Condensed Consolidated Statement of Earnings
for the Three Months Ended September 30, 1994 2
Condensed Consolidated Statement of Earnings
for the Six Months Ended September 30, 1994 3
Condensed Consolidated Balance Sheets 4
Condensed Consolidated Statement of Cash Flows
for the Six Months Ended September 30, 1994 5
Notes to Condensed Consolidated Financial Statements 6-8
ITEM 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition 9-11
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
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3
3333 HOLDING CORPORATION
CENTEX DEVELOPMENT COMPANY, L.P.
PAGE
PART I. FINANCIAL INFORMATION
ITEM 1. Condensed Combining Financial Statements 14
Condensed Combining Statement of Operations
for the Three Months Ended September 30, 1994 15
Condensed Combining Statement of Operations
for the Six Months Ended September 30, 1994 16
Condensed Combining Balance Sheets 17
Condensed Combining Statement of Cash Flows
for the Six Months Ended September 30, 1994 18
Notes to Condensed Combining Financial Statements 19
ITEM 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition 20
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K 21
SIGNATURES 22-23
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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 Registrant'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.
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CENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(dollars in thousands, except per share data)
(unaudited)
FOR THE THREE MONTHS ENDED September 30,
--------------------------------
1994 1993
------------- -------------
REVENUES
Home Building $ 554,959 $ 454,563
Financial Services 29,889 51,147
Contracting and Construction Services 270,861 258,608
------------- -------------
855,709 764,318
------------- -------------
COSTS AND EXPENSES
Home Building 522,927 432,863
Financial Services 28,308 30,808
Contracting and Construction Services 271,406 259,134
Other, net 493 661
Equity in Earnings of Affiliate (CXP) (5,762) (8,028)
Corporate General and Administrative 3,643 3,697
Interest Expense 7,607 7,182
------------- -------------
828,622 726,317
------------- -------------
EARNINGS BEFORE INCOME TAXES 27,087 38,001
Income Taxes 10,186 15,155
------------- -------------
NET EARNINGS $ 16,901 $ 22,846
============= =============
EARNINGS PER SHARE $ .55 $ .70
============= =============
AVERAGE SHARES OUTSTANDING 30,732,544 32,796,510
============= =============
CASH DIVIDENDS PER SHARE $ .05 $ .05
============= =============
Centex Construction Products, Inc. (CXP) became 49% owned in April 1994 as a
result of an Initial Public Offering representing 51% of its equity. CXP's
revenues of $49,462 for fiscal 1994 and the related costs and expenses have
been reclassified into "Equity in Earnings of Affiliate (CXP)". This
reclassification facilitates comparisons between the periods.
Mortgage Banking and Savings and Loan operations have been combined into a
single financial reporting segment - Financial Services.
See notes to condensed consolidated financial statements.
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CENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(dollars in thousands, except per share data)
(unaudited)
FOR THE SIX MONTHS ENDED September 30,
--------------------------------
1994 1993
------------- -------------
REVENUES
Home Building $ 1,086,855 $ 841,137
Financial Services 67,473 98,055
Contracting and Construction Services 533,898 480,088
------------- -------------
1,688,226 1,419,280
------------- -------------
COSTS AND EXPENSES
Home Building 1,026,591 803,008
Financial Services 60,475 60,009
Contracting and Construction Services 535,048 481,363
Other, net 908 927
Equity in Earnings of Affiliate (CXP) (9,475) (11,906)
Corporate General and Administrative 7,340 7,044
Interest Expense 14,801 14,127
------------- -------------
1,635,688 1,354,572
------------- -------------
EARNINGS BEFORE GAIN ON CXP INITIAL
PUBLIC OFFERING AND INCOME TAXES 52,538 64,708
Gain on CXP Initial Public Offering 59,328 -
------------- -------------
EARNINGS BEFORE INCOME TAXES 111,866 64,708
Income Taxes 41,567 24,856
------------- -------------
NET EARNINGS $ 70,299 $ 39,852
============= =============
EARNINGS PER SHARE $ 2.24 $ 1.22
============= =============
AVERAGE SHARES OUTSTANDING 31,344,249 32,623,289
============= =============
CASH DIVIDENDS PER SHARE $ .10 $ .10
============= =============
Centex Construction Products, Inc. (CXP) became 49% owned in April 1994 as a
result of an Initial Public Offering representing 51% of its equity. CXP's
revenues of $92,541 for fiscal 1994 and the related costs and expenses have
been reclassified into "Equity in Earnings of Affiliate (CXP)". This
reclassification facilitates comparisons between the periods.
Mortgage Banking and Savings and Loan operations have been combined into a
single financial reporting segment - Financial Services.
See notes to condensed consolidated financial statements.
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CENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
Centex Corporation and
Subsidiaries Centex Corporation Financial Services
------------------------ ------------------------ ------------------------
September 30, March 31, September 30, March 31, September 30, March 31,
1994* 1994** 1994* 1994** 1994* 1994**
------------ ---------- ------------ ---------- ------------ -----------
ASSETS
Cash and Cash Equivalents $ 30,584 $ 76,287 $ 24,821 $ 13,284 $ 5,763 $ 63,003
Marketable Securities 149,004 78,241 - - 149,004 78,241
Receivables -
Residential Mortgage Loans 437,129 677,641 - - 437,129 677,641
Other 247,404 251,531 231,321 226,674 16,083 24,857
Affiliates - - - - 80,397 80,806
Inventories 1,141,808 1,097,457 1,141,808 1,097,457 - -
Investments -
Centex Development Company, L.P. 62,457 71,000 62,457 71,000 - -
Centex Construction Products, Inc. 85,479 - 85,479 - - -
Joint Ventures and Other 6,844 56,928 6,844 56,928 - -
Unconsolidated Subsidiaries - - 10,970 5,263 - -
Property and Equipment, net 44,526 188,930 24,470 169,234 20,056 19,696
Government-Guaranteed S&L Assets -
Receivables 7,770 19,030 - - 7,770 19,030
Covered Assets 12,766 24,737 - - 12,766 24,737
Other Assets and Deferred Charges 35,856 38,574 16,073 22,101 19,783 16,473
---------- ---------- ---------- ---------- ---------- -----------
$2,261,627 $2,580,356 $1,604,243 $1,661,941 $ 748,751 $ 1,004,484
========== ========== ========== ========== ========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable and Accrued Liabilities $ 586,674 $ 618,943 $ 510,458 $ 504,622 $ 76,216 $ 114,321
S&L Deposits and FHLB Borrowings 175,154 211,055 - - 175,154 211,055
Short-term Debt 543,745 783,585 151,084 206,638 392,661 576,947
Long-term Debt 222,218 222,832 222,218 222,832 - -
Deferred Income Taxes 37,144 51,180 23,791 35,088 13,353 16,092
Negative Goodwill 21,502 24,102 21,502 24,102 - -
Stockholders' Equity 675,190 668,659 675,190 668,659 91,367 86,069
---------- ---------- ---------- ---------- ---------- -----------
$2,261,627 $2,580,356 $1,604,243 $1,661,941 $ 748,751 $ 1,004,484
========== ========== ========== ========== ========== ===========
See notes to condensed consolidated financial statements. In the supplemental data presented above,
"Centex Corporation" represents the
* Unaudited adding together of all subsidiaries other
** Condensed from audited financial statements. than those included in Financial Services
(CTX Mortgage and CTX Holding Company and
its savings and loan subsidiary,
Texas Trust Savings Bank, FSB and Affiliates).
Transactions between Centex
Corporation and Financial Services have been
eliminated from the Centex
Corporation and Subsidiaries balance sheets.
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CENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(dollars in thousands)
(unaudited)
FOR THE SIX MONTHS ENDED September 30,
------------------------------
1994 1993
------------- -------------
CASH FLOWS - OPERATING ACTIVITIES
Net Earnings $ 70,299 $ 39,852
Adjustments -
Depreciation, Depletion and Amortization 4,093 9,351
Deferred Income Taxes (7,224) (13,321)
Equity in Loss (Earnings) of Joint Ventures and
Unconsolidated Subsidiaries, net 487 (2,190)
Equity in Earnings of Affiliate (CXP) (6,111) -
------------ ------------
61,544 33,692
Decrease (Increase) in Receivables 4,127 (42,266)
Increase in Inventories (44,565) (95,226)
(Decrease) Increase in Payables and Accruals (32,131) 113,613
Decrease in Other Assets 2,072 1,774
Other, net (6,950) (2,037)
------------ ------------
(15,903) 9,550
------------ ------------
CASH FLOWS - INVESTING ACTIVITIES
Decrease (Increase) in Advances to Joint Ventures and
Unconsolidated Subsidiaries 58,140 (6,975)
Increase in Investment in Centex Construction
Products, Inc. (79,368) -
Decrease in Property and Equipment
due to CXP initial public offering, net 146,657 -
Property and Equipment Additions, net (7,985) (16,711)
(Increase) Decrease in Marketable Securities (70,763) 11,715
------------ ------------
46,681 (11,971)
------------ ------------
CASH FLOWS - FINANCING ACTIVITIES
Decrease (Increase) in Residential Mortgage Loans 240,411 (271,070)
Decrease in Government-Guaranteed S&L Assets 23,231 9,013
Decrease in S&L Deposits and Debt (35,901) (74)
(Decrease) Increase in Debt (240,454) 257,322
Stock and Dividend Transactions, net (63,768) 4,048
------------ ------------
(76,481) (761)
------------ ------------
NET DECREASE IN CASH (45,703) (3,182)
------------ ------------
CASH AT BEGINNING OF YEAR 76,287 26,065
------------ ------------
CASH AT END OF PERIOD $ 30,584 $ 22,883
============ ============
See notes to condensed consolidated financial statements.
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CENTEX CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1994
(unaudited)
(A) A summary of changes in stockholders' equity is presented below:
Capital in
Common Excess of Retained
Stock Par Value Earnings Total
------------ ------------ ------------ ------------
(dollars in thousands)
Balance, March 31, 1994 $ 7,916 $ 26,631 $ 634,112 $ 668,659
Net Earnings - - 70,299 70,299
Exercise of Stock Options 18 1,008 - 1,026
Retirement of 2,521,800 Shares (630) (27,402) (33,691) (61,723)
Cash Dividends - - (3,071) (3,071)
------------ ------------ ------------ ------------
Balance, September 30, 1994 $ 7,304 $ 237 $ 667,649 $ 675,190
============ ============ ============ ============
(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:
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NOTES - continued
CENTEX CORPORATION, 3333 HOLDING CORPORATION AND SUBSIDIARY
AND CENTEX DEVELOPMENT COMPANY, L.P.
SUPPLEMENTARY CONDENSED COMBINED BALANCE SHEETS
(dollars in thousands)
September 30, March 31,
1994 1994*
------------- ------------
ASSETS
Cash and Cash Equivalents $ 31,499 $ 76,388
Marketable Securities 149,004 78,241
Receivables 685,573 930,428
Inventories 1,260,839 1,223,753
Investments in
Centex Construction Products, Inc. 85,479 -
Joint Ventures and Unconsolidated Subsidiaries 6,844 56,928
Property and Equipment, net 44,526 188,930
Government-Guaranteed S&L Assets 20,536 43,767
Other Assets and Deferred Charges 35,856 38,574
------------ ------------
$ 2,320,156 $ 2,637,009
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable and Accrued Liabilities $ 588,850 $ 620,824
S&L Deposits and FHLB Borrowings 175,154 211,055
Short-term Debt 599,426 837,734
Long-term Debt 222,218 222,832
Deferred Income Taxes 37,144 51,180
Negative Goodwill 21,502 24,102
Stockholders' Equity 675,862 669,282
------------ ------------
$ 2,320,156 $ 2,637,009
============ ============
*Condensed from audited financial statements.
SUPPLEMENTARY CONDENSED COMBINED STATEMENT OF EARNINGS
(dollars in thousands)
September 30,
------------------------------
FOR THE SIX MONTHS ENDED 1994 1993
------------- ------------
Revenues $ 1,688,606 $ 1,521,371
Costs and Expenses 1,576,691 1,456,720
------------ ------------
Earnings Before Income Taxes 111,915 64,651
Income Taxes 41,567 24,856
------------ ------------
NET EARNINGS $ 70,348 $ 39,795
============ ============
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NOTES - continued
(C) In order to assure the future availability of land for home building,
the Company has made deposits totaling $9 million as of September 30,
1994 for options to purchase properties having a total purchase price
of approximately $349 million. These options expire at various dates
to 1997. The Company has also committed to purchase land and
developed lots totaling approximately $91 million. In addition, the
Company has executed lot purchase contracts with CDC which aggregate
approximately $8 million.
(D) Interest expenses relating to the financial services operations
(Mortgage Banking and Savings and Loan) are included in their
respective costs and expenses. Interest related to non-financial
services operations are included as interest expense as summarized
below.
Six Months Ended
--------------------------------
9/30/94 9/30/93
------------ ------------
Total Interest Incurred $ 30,000 $ 34,611
Less -
Financial Services (15,199) (20,484)
------------ ------------
INTEREST EXPENSE $ 14,801 $ 14,127
============ ============
(E) During the quarter ended June 30, 1994, Centex Construction Products,
Inc. completed an initial public offering of 51% of its stock and is
trading on the New York Stock Exchange under the symbol "CXP." Centex
received a dividend and other payments from CXP totaling approximately
$186 million which was used to reduce Centex's outstanding
indebtedness.
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CENTEX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
Centex consolidated revenues for the quarter totaled a record $856
million, a 12% increase over revenues of $764 million for the same quarter last
year. Centex's net earnings for the quarter ended September 30, 1994 were
$16.9 million versus $22.8 million for the same quarter last year. Earning per
share for this year's quarter were $.55 compared to $.70 for the same quarter
in fiscal 1994. Earnings per share declined proportionately less than net
earnings due to fewer average shares outstanding in the current quarter. The
quarter's record results from Home Building were offset by a major decline in
earnings from the Company's Financial Services operations. For the six months
ended September 30, 1994, corporate revenues reached an all-time high $1.7
billion, up 19% over $1.4 billion for the same period last year. Net earnings
for the current six months, prior to the gain on the sale of a 51% interest in
Centex Construction Products, Inc. (CXP), Centex's former Construction Products
subsidiary, were $32.8 million versus $39.9 million for the same period last
year. Including the gain, Centex's total net earnings for the current six
months were $70.3 million. Earnings per share for the six months this year,
before the CXP gain, were $1.05 compared to $1.22 for the same period in fiscal
1994. Including the gain, Centex's earnings per share for the current six
months were $2.24.
On April 19, 1994, CXP completed the sale of 11,730,000 shares, or
51%, of its common stock through an initial public offering. Including a
dividend and other payments, Centex received $186 million from the transaction
and used the funds to reduce its short-term debt. Centex retains ownership of
49% of CXP's stock.
The following table compares Home Building results for the quarter
ended and fiscal year-to-date September 30, 1994 to the quarter ended and
fiscal year-to-date September 30, 1993 (in millions, except unit and per unit
data):
Fiscal Fiscal
Quarter Ended Quarter Ended Year-to-Date Year-to-Date
9/30/94 9/30/93 9/30/94 9/30/93
-------------------- -------------------- --------------------- -------------------
Home Building Revenues $ 555.0 100.0% $ 454.5 100.0% $1,086.9 100.0% $841.1 100.0%
Cost of Sales (460.2) (82.9) (377.1) (83.0) (903.3) (83.1) (699.4) (83.2)
Selling, General &
Administrative (62.7) (11.3) (55.7) (12.3) (123.3) (11.3) (103.6) (12.3)
-------- ----- -------- ----- -------- ----- ------ -----
Operating Earnings $ 32.1 5.8% $ 21.7 4.7% $ 60.3 5.6% $ 38.1 4.5%
======== ===== ======== ===== ======== ===== ====== =====
Units Closed 3,469 3,134 6,702 5,086
Unit Sales Price $158,613 $144,058 $156,689 $143,435
% Change 10.1% 4.6% 9.2% 5.6%
Operating Earnings per
Unit $9,234 $6,924 $8,992 $6,567
% Change 33.4% (12.1)% 36.9% 37.1%
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Home Building revenues for the current quarter were $555.0 million,
up 22% from $454.6 million for the same quarter in the prior year. Operating
earnings from Home Building reached a record $32.0 million for the quarter this
year, a 48% increase from $21.7 million for the same quarter in fiscal 1994.
Home closings for the current quarter totaled 3,469 units, an 11% increase over
3,134 units for the same quarter last year. Increased closings in the West,
Midwest and East regions were somewhat offset by declines in the Southeast and
Southwest regions. Unit orders for the quarter this year were 2,771. Orders
declined in every region except the West and were 16% below orders of 3,288 for
the same quarter in fiscal 1994. For the six months, Home Building revenues
were a record $1.09 billion this year, a 29% increase over $841.1 million for
the same period last year. Operating earnings from Home Building reached an
all-time high of $60.3 million, 58% higher than $38.1 million a year ago. Home
closings for the six months rose 15% to 6,702 units this year from 5,806 units
for the similar period last year. Unit orders for the current six months were
14% less than orders for the same period a year earlier. The backlog of homes
sold but not closed at September 30, 1994 was 4,737 units, 20% less than the
backlog of 5,910 units at September 30, 1993 and 13% below the backlog of 5,435
units reported at June 30, 1994.
Current quarter revenues from Financial Services, which combines the
results of the Mortgage Banking and the Savings and Loan operations, totaled
$29.9 million, a 42% decline from $51.1 million a year ago. Operating earnings
from Financial Services were $1.6 million for the quarter this year, a 92%
decline from $20.3 million for the same quarter a year ago. Of the total,
Mortgage Banking operating earnings were $415,000 this year compared to $20.0
million for the same quarter in fiscal 1994. Operating earnings from the
Savings and Loan were $1.2 million for the quarter this year compared to
$384,000 for the same quarter a year ago. Mortgage originations closed for the
quarter were 10,322, 33% less than 15,471 closing for the same quarter last
year. Originations for Centex-built homes were 2,270 this year, a 4% decline
from a year earlier. "Spot" (third-party) originations declined 39% to 8,052
in the current quarter. Net new mortgage applications for the quarter declined
approximately 47% from net applications in last year's second quarter. The
drop in the applications is primarily attributable to a precipitous decline in
refinancings as a result of higher mortgage rates. For the six months,
Financial Services revenues were $67.5 million this year, down 31% from $98.1
million for the same period last year. Operating earnings from Financial
Services were $7.0 million for the six months this year versus $38.0 million
for the same period a year ago. Of the total, operating earnings from Mortgage
Banking were $5.2 million for the current six months compared to $37.0 million
for the same period last year. Savings and Loan operating earnings were $1.8
million for the current six months compared to $1.1 million for the same period
in the prior year. Loans closed for the current six months were 21,660, 28%
less than loan closings for the same period last year. Originations for Centex
homes rose 6% for the current six months to 4,552, while spot originations
declined 33% to 17,108 for the six months this year. Mortgage Banking results
have been negatively impacted by rapidly rising interest rates and a highly
competitive industry environment since early in calendar 1994. Pending
regulatory approval and satisfaction of other conditions, Centex is selling the
deposits and branch operations of its savings and loan operation, Texas Trust
Savings Bank, FSB, for a pre-tax gain of approximately $3 million. The sale is
one of the final steps necessary for Centex to exit the savings and loan
business.
Revenues from Contracting and Construction Services were $270.9
million for the quarter this year, a 5% increase over revenues of $258.6
million reported for the same quarter in the prior fiscal year. Contracting
and Construction Services reported an operating loss of $545,000 this year
compared to a $526,000 loss for the same quarter in fiscal 1994. The division
continues to be negatively affected by competitive pressure on margins. For
the six months, Contracting and Construction Services had revenues of $533.9
million this year, 11% higher than $480.1 million for the same period in fiscal
1994. The division had an operating loss of $1.2 million for the current six
months compared to a loss of $1.3 million for the same period last year. The
Construction Group received $266 million of new contracts for the quarter this
year compared to $279 million of new work for the same quarter in fiscal 1994.
For the current six months, the Group received $677 million of new contracts, a
50% increase over $450 million of new work reported for the same period in the
prior year. The backlog of uncompleted construction contracts at September 30,
1994 was $1.379 billion, 21% higher than $1.143 billion at September 30, 1993
and about the same as the record backlog level of $1.384 billion at June 30,
1994.
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14
For the current quarter, Centex Corporation's 49% "Equity in
Earnings of Affiliate (CXP)" was $5.8 million compared with $8.0 million for
last year's quarter representing Centex's 100% ownership of CXP. For the six
months, Centex's 49% "Equity in Earnings of Affiliate (CXP)" was $9.5 million
versus $11.9 million for the similar period a year ago when Centex owned 100%
of CXP. Construction Products continues to benefit from high levels of demand
and increasing prices for its cement and gypsum wallboard products.
STOCK REPURCHASE PROGRAM
Since April 1994, the Company has repurchased more than 2.5 million
shares of its common stock under its stock repurchase programs that provides
for the repurchase of up to 3.1 million shares. Depending on market
conditions, the Company will continue to repurchase shares under this
authorization and the Centex Board may authorize additional stock repurchases
in the future.
FINANCIAL CONDITION
The Company has adequate unsecured revolving credit facilities.
These credit facilities serve as back-up lines for overnight borrowings under
uncommitted bank lines and commercial paper. In addition, CTX Mortgage Company
has sufficient committed and uncommitted credit facilities of its own to
finance mortgages which are held during the period while they are being
securitized and readied for delivery against forward sale commitments. Based
on its financial condition and existing credit relationships, Centex believes
it will be able to provide adequately for its current and future growth.
OUTLOOK
Climbing interest rates and the volatile economic environment will
continue to negatively impact both the Home Building and Mortgage Banking
businesses and the protracted length of the rate-driven slowdown will adversely
affect future operating results. Additionally, in reaction to lower mortgage
origination volumes, marginally profitable mortgage offices are being closed
and overhead is being reduced in the Mortgage Banking operation. These
actions, combined with the anticipated positive impact of an ongoing
industry-wide consolidation, should result in improved Mortgage Banking
profitability. The company's fundamentals remain strong and its organization
is strategically positioned to regain earnings momentum when interest rates
stabilize or decline.
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15
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 September 30, 1994.
All other items required under Part II are omitted because they are not
applicable.
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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
November 11, 1994 /s/ David W. Quinn
---------------------------------------
David W. Quinn
Executive Vice President and Chief
Financial Officer
(principal financial officer)
November 11, 1994 /s/ Michael S. Albright
---------------------------------------
Michael S. Albright
Vice President - Finance and Controller
(chief accounting officer)
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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.
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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 September 30,
------------------------------------------------------------------------------------
1994 1993
---------------------------------------- ----------------------------------------
3333 Holding 3333 Holding
Centex Corporation Centex Corporation
Development and Development and
Combined Company, L.P. Subsidiary Combined Company, L.P. Subsidiary
------------ ------------- ------------- ------------ ------------- -------------
Revenues $ 1,330 $ 1,197 $ 376 $ 10,136 $ 10,039 $ 134
Costs and Expenses 1,559 1,461 341 10,800 10,675 162
---------- --------- ------- --------- --------- -------
Earnings (Loss) Before Income Taxes (229) (264) 35 (664) (636) (28)
Income Taxes - - - - - -
---------- --------- ------- --------- --------- -------
Net Earnings (Loss) $ (229) $ (264) $ 35 $ (664) $ (636) $ (28)
========== ========= ======= ========= ========= =======
Earnings (Loss) Per Share/Unit
(Average Outstanding Shares,
1,000; Units, 1,000) $ (264) $ 35 $ (636) $ (28)
========= ======= ========= =======
See notes to condensed combining financial statements.
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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 Six Months Ended September 30,
------------------------------------------------------------------------------------
1994 1993
---------------------------------------- ----------------------------------------
3333 Holding 3333 Holding
Centex Corporation Centex Corporation
Development and Development and
Combined Company, L.P. Subsidiary Combined Company, L.P. Subsidiary
------------ ------------- ------------- ------------ ------------- -------------
Revenues $ 4,435 $ 4,174 $ 712 $ 12,064 $ 11,871 $ 268
Costs and Expenses 4,801 4,589 663 12,992 12,742 325
--------- -------- ------- ---------- --------- ---------
Earnings (Loss) Before Income Taxes (366) (415) 49 (928) (871) (57)
Income Taxes - - - - - -
--------- -------- ------- ---------- --------- ---------
Net Earnings (Loss) $ (366) $ (415) $ 49 $ (928) $ (871) $ (57)
========= ======== ======= ========== ========= =========
Earnings (Loss) Per Share/Unit
(Average Outstanding Shares,
1,000; Units, 1,000) $ (415) $ 49 $ (871) $ (57)
======== ======= ========= =========
See notes to condensed combining financial statements.
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3333 HOLDING CORPORATION AND SUBSIDIARY
AND CENTEX DEVELOPMENT COMPANY, L.P.
CONDENSED COMBINING BALANCE SHEETS
(dollars in thousands)
September 30, 1994* March 31, 1994**
------------------------------------------- ----------------------------------------
3333 Holding 3333 Holding
Centex Corporation Centex Corporation
Development and Development and
Combined Company, L.P. Subsidiary Combined Company, L.P. Subsidiary
------------ ------------- ------------- ------------ -------------- -------------
ASSETS
Cash $ 915 $ 913 $ 2 $ 101 $ 101 $ -
Accounts Receivable 173 702 165 238 873 133
Notes Receivable -
Centex Corporation and Subsidiaries 7,700 - 7,700 7,700 - 7,700
Other 1,032 1,032 - 1,151 1,151 -
Investment in Affiliate - - 767 - - 767
Projects Held for Development
and Sale -
Forster Ranch 51,820 51,820 - 49,199 49,199 -
Other 67,168 67,168 - 69,703 69,703 -
---------- --------- ------- -------- -------- ---------
$ 128,808 $ 121,635 $ 8,634 $128,092 $121,027 $ 8,600
========== ========= ======= ======== ======== =========
LIABILITIES, STOCKHOLDERS' EQUITY AND PARTNERS' CAPITAL
Accounts Payable and
Accrued Liabilities $ 2,909 $ 2,741 $ 862 $ 3,263 $ 3,154 $ 877
Notes Payable -
Centex Corporation and Subsidiaries 7,600 - 7,600 7,600 - 7,600
Forster Ranch 51,820 51,820 - 49,199 49,199 -
Other 3,861 3,861 - 4,950 4,950 -
Land Sale Deposits 45 45 - 141 141 -
---------- --------- ------- -------- -------- ---------
Total Liabilities 66,235 58,467 8,462 65,153 57,444 8,477
Stockholders' Equity and
Partners' Capital 62,573 63,168 172 62,939 63,583 123
---------- --------- ------- -------- -------- ---------
$ 128,808 $ 121,635 $ 8,634 $128,092 $121,027 $ 8,600
========== ========= ======= ======== ======== =========
* Unaudited
** Condensed from audited financial statements.
See notes to condensed combining financial statements.
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3333 HOLDING CORPORATION AND SUBSIDIARY
AND CENTEX DEVELOPMENT COMPANY, L.P.
CONDENSED COMBINING STATEMENT OF CASH FLOWS
(dollars in thousands)
(unaudited)
For The Six Months Ended September 30,
-----------------------------------------------------------------------------------
1994 1993
---------------------------------------- ----------------------------------------
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 (Loss) $ (366) $ (415) $ 49 $ (928) $ (871) $ (57)
Net Change in Payables, Accruals,
Deposits and Receivables (385) (338) (47) 426 368 58
Decrease (Increase) in Notes Receivable 119 119 - (550) (550) -
(Increase) Decrease in Projects Held
for Development and Sale (86) (86) - 8,027 8,027 -
--------- -------- -------- ------- -------- -------
(718) (720) 2 6,975 6,974 1
--------- -------- -------- ------- -------- -------
Cash Flows - Financing Activities
Increase (Decrease) in Notes Payable 1,532 1,532 - (7,851) (7,851) -
--------- -------- -------- ------- -------- -------
1,532 1,532 - (7,851) (7,851) -
--------- -------- -------- ------- -------- -------
Net Increase (Decrease) In Cash 814 812 2 (876) (877) 1
Cash At Beginning Of Year 101 101 - 1,252 1,252 -
--------- -------- -------- ------- -------- -------
Cash At End Of Period $ 915 $ 913 $ 2 $ 376 $ 375 $ 1
========= ======== ======== ======= ======== =======
See notes to condensed combining financial statements.
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3333 HOLDING CORPORATION AND SUBSIDIARY
AND CENTEX DEVELOPMENT COMPANY, L.P.
NOTES TO CONDENSED COMBINING FINANCIAL STATEMENTS
SEPTEMBER 30, 1994
(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 Company ("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, Holding and subsidiary and the Partnership.
(C) The Partnership sells lots to Centex Real Estate Corporation ("CREC")
pursuant to certain purchase and sale agreements. Revenues from these
sales totaled $3,468,000 and $1,716,000 for the six months ended
September 30, 1994 and 1993 respectively.
(D) A summary of changes in stockholders' equity is presented below
(dollars in thousands).
For the Six Months Ended September 30, 1994
----------------------------------------------------------------------------
Centex Development 3333 Holding Corporation
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, 1994 $ 62,939 $ 500 $ 767 $ 62,316 $ 1 $ 800 $ (678)
Net Earnings/Loss (366) - - (415) - - 49
---------- ---------- --------- --------- ----------- ------------ ----------
BALANCE AT SEPTEMBER 30, 1994 $ 62,573 $ 500 $ 767 $ 61,901 $ 1 $ 800 $ (629)
========== ========== ========= ========= =========== =========== ==========
(E) The Partnership and the holder of the Forster Ranch non-recourse notes
have signed an agreement to transfer ownership of the property in
satisfaction of the debt, subject to revision of certain land use
entitlements, by April 1995. In connection with this agreement, CREC
has agreed to fund certain holding and other costs CDC will incur
through April 1995 in connection with its rezoning efforts.
(F) Effective April 1, 1994, Development designated Holding to replace
Centex Development Management Company as manager of the Partnership.
Holding will be compensated by the Partnership for its services.
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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
LIQUIDITY AND CAPITAL RESOURCES
The liquidity of 3333 Holding Corporation ("Holding") and Subsidiary
("Development") and Centex Development Company, L.P. (the "Partnership") is
largely dependent on the timing, which is uncertain, of future real estate
sales. 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. Based on their current financial condition, these companies believe
they will be able to provide or obtain the necessary funding for their current
operations and future expansion needs.
RESULTS OF OPERATIONS
For the six months ended September 30, 1994, the combined entities had
revenues of $4,435,000 and a loss of $366,000. For the quarter, revenues were
$1,330,000 and the loss was $229,000. The revenues for the six months included
proceeds from the sale of commercial property in California and Texas, and
residential property in Florida, New Jersey and Illinois. Due to the financial
dynamics of the Partnership's business, a comparison with the revenues from
real estate sales for the same period in 1993 is not meaningful. The timing of
future revenues from the development and sale of real estate will result in
fluctuating operating results for the Partnership.
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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 September 30, 1994.
All other items required under Part II are omitted because they are not
applicable.
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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
November 11, 1994 /s/ J. Stephen Bilheimer
----------------------------
J. Stephen Bilheimer
President
November 11, 1994 /s/ Roger Sefzik
----------------------------
Roger Sefzik
Vice President and Treasurer
(chief accounting officer)
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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
November 11, 1994 /s/ J. Stephen Bilheimer
----------------------------------
J. Stephen Bilheimer
President
November 11, 1994 /s/ Roger Sefzik
----------------------------------
Roger Sefzik
Vice President and Treasurer
(chief accounting officer)
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INDEX TO EXHIBITS
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ----------- ------------
27.1 Financial Data Schedule for Centex Corporation
27.2 Financial Data Schedule for Centex Development Company, L.P.
27.3 Financial Data Schedule for 3333 Holding Corporation