EXHIBIT 99.1

NEWS RELEASE

FOR IMMEDIATE RELEASE

JULY 28, 2003                             CONTACT: INVESTOR RELATIONS
                                          PHONE:   865-380-3206
                                          FAX:     865-380-3784


CERBERUS DECLINES TO MAKE AN OFFER FOR CLAYTON HOMES, INC.

Clayton Homes (CMH: NYSE) announced that it has received a letter from Cerberus
Capital Management tonight indicating that they no longer have interest in
extending an offer for the Company. "For more than a week, a consortium of
investors led by Cerberus, conducted extensive due diligence in all four of our
operating groups," remarked Kevin T. Clayton, chief executive officer. "They
decided against making any offer."

"We would like to take the opportunity to thank Cerberus and their partners for
the highly professional manner in which they performed their work and the way in
which they interacted with Clayton team members," added John J. Kalec, chief
financial officer.

Clayton Homes, Inc. is a vertically integrated manufactured housing company with
20 manufacturing plants, 296 Company owned stores, 611 independent retailers, 86
manufactured housing communities, and financial services operations that provide
mortgage services for 168,000 customers and insurance protection for 100,000
families.

This press release contains forward-looking statements with respect to
management's beliefs about the financial condition, results of operations and
business of Clayton Homes in the future. These statements involve risks and
uncertainties. The actual outcome could differ materially from that contemplated
by such statements. Factors that could cause or contribute to such differences
could include, but are not limited to: market conditions in the manufactured
housing market, the degree of continued market acceptance of Clayton Homes'
products, competition, failure of the requisite stockholders to approve the
merger, litigation related to the merger, and merger-related costs and expenses.
The non-merger related factors mentioned above, as well as other factors that
could affect Clayton Homes' business, are discussed in Clayton Homes' Annual
Report on Form 10-K for the fiscal year ended June 30, 2002, on file with the
Securities and Exchange Commission. Clayton Homes does not undertake any
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.

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