UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934. For the period ended DECEMBER 31, 1994.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934. For the transition period from N/A to N/A.
--- ---
Commission File Number: 1-4785
DEL WEBB CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 86-0077724
(State or other jurisdiction (IRS Employer Identification Number)
of incorporation or organization)
6001 North 24th Street, Phoenix, Arizona 85016
(Address of principal executive offices) (Zip Code)
(602) 808-8000
(Registrant's phone number, including area code)
2231 East Camelback Road, Phoenix, Arizona 85016
- - -------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report
Indicate by check mark whether the registrant (1) has 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 (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- ----
Indicate the number of shares outstanding of each of the issuer's classes of
stock, as of the last practicable date.
Class of Common Stock Outstanding at January 26, 1995
- - ------------------------------ ----------------------------------
$.001 14,869,442 shares
DEL WEBB CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED
DECEMBER 31, 1994
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements:
Consolidated Balance Sheets as of December 31, 1994,
June 30, 1994 and December 31, 1993............................. 1
Consolidated Statements of Earnings for the three and six
months ended December 31, 1994 and 1993......................... 2
Consolidated Statements of Cash Flows for the six
months ended December 31, 1994 and 1993......................... 3
Notes to Consolidated Financial Statements........................ 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................... 9
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders...............15
Item 6. Exhibits and Reports on Form 8-K..................................15
Separate financial statements of the Company's subsidiaries that are
guarantors of the Company's 10 7/8% Senior Notes due 2000 are not included
because those subsidiaries are jointly and severally liable as guarantors of the
Notes and the aggregate assets, liabilities, earnings and equity of those
subsidiaries are substantially equivalent to the assets, liabilities, earnings
and equity of the Company and its subsidiaries on a consolidated basis.
<TABLE>
<CAPTION>
DEL WEBB CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE DATA)
DECEMBER 31, JUNE 30, DECEMBER 31,
1994 1994 1993
(UNAUDITED) (UNAUDITED)
- - -------------------------------------------------------------------------------------------------------------------
ASSETS
- - -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Real estate inventories (Notes 2,3 and 6) $ 763,293 $ 662,613 $ 516,612
Cash and short-term investments 5,053 6,474 8,853
Receivables 8,688 10,385 9,679
Property and equipment, net (Note 1) 23,202 36,773 12,326
Deferred income taxes 6,231 11,604 17,960
Other assets 33,909 30,575 27,726
- - -------------------------------------------------------------------------------------------------------------------
$ 840,376 $ 758,424 $ 593,156
===================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
- - -------------------------------------------------------------------------------------------------------------------
Notes payable, senior and subordinated debt (Note 3) $ 445,672 $ 395,676 $ 279,316
Subcontractor and trade accounts payable 44,913 45,443 30,359
Accrued liabilities and other payables 42,538 39,905 28,698
Home sale deposits 82,198 62,797 49,164
Income taxes payable 7,228 7,155 6,564
Net liabilities of discontinued operations 5,026 6,124 7,956
- - -------------------------------------------------------------------------------------------------------------------
Total liabilities 627,575 557,100 402,057
- - -------------------------------------------------------------------------------------------------------------------
Shareholders' equity:
Common stock, $.001 par value at December 31, 1994,
without par value at June 30, 1994 and
December 31, 1993. Authorized 30,000,000 shares;
issued 15,805,004 shares at December 31, 1994,
15,828,940 shares at June 30, 1994 and
15,837,388 shares at December 31, 1993 (Note 7) 16 112,944 113,181
Additional paid-in capital (Note 7) 121,218 8,333 8,297
Retained earnings 107,065 96,630 87,127
- - -------------------------------------------------------------------------------------------------------------------
228,299 217,907 208,605
Less cost of common stock in treasury, 929,759 shares
at December 31, 1994, 1,132,065 shares at June 30, 1994
and 1,147,917 shares at December 31, 1993 (11,715) (14,600) (14,849)
Less deferred compensation (3,783) (1,983) (2,657)
- - -------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 212,801 201,324 191,099
- - -------------------------------------------------------------------------------------------------------------------
$ 840,376 $ 758,424 $ 593,156
===================================================================================================================
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
DEL WEBB CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
- - -------------------------------------------------------------------------------------------------------------------
1994 1993 1994 1993
- - -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues (Note 5) $ 176,058 $ 125,563 $ 338,940 $ 213,097
Cost of sales (Note 5) 139,395 100,032 271,300 169,851
Selling, general and administrative expenses 26,495 19,046 49,307 33,940
- - -------------------------------------------------------------------------------------------------------------------
Operating earnings 10,168 6,485 18,333 9,306
Income tax expense (Note 4) 3,559 2,270 6,417 3,257
- - -------------------------------------------------------------------------------------------------------------------
Net earnings $ 6,609 $ 4,215 $ 11,916 6,049
===================================================================================================================
Weighted average shares outstanding 15,117 14,845 15,044 15,104
===================================================================================================================
Net earnings per share $ .44 $ .28 $ .79 $ .40
===================================================================================================================
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
DEL WEBB CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
SIX MONTHS ENDED
DECEMBER 31,
- - -------------------------------------------------------------------------------------------------------------------
1994 1993
- - -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers related to community home sales $ 260,980 $ 186,508
Cash received from commercial land sales 19 8
Cash paid for costs related to community home construction (177,363) (124,996)
- - -------------------------------------------------------------------------------------------------------------------
Cash provided by community sales activities 83,636 61,520
Cash paid for land acquisitions at operating communities (1,524) (2,054)
Cash paid for lot development at operating communities (22,409) (18,153)
Cash paid for amenity development at operating communities (14,925) (16,667)
- - -------------------------------------------------------------------------------------------------------------------
Net cash provided by operating communities 44,778 24,646
Cash paid for costs related to communities in the pre-operating stage (37,161) (17,117)
Cash received from customers related to conventional homebuilding 64,891 25,563
Cash paid for land, development, construction and other costs related to
conventional homebuilding (73,949) (45,854)
Cash received from customers related to residential land development project 8,367 7,742
Cash paid for costs related to residential land development project (8,621) (5,070)
Cash paid for corporate activities (17,493) (13,083)
Interest paid (17,137) (11,716)
Cash paid for income taxes (971) (100)
Net operating activities of discontinued operations (698) (1,845)
- - -------------------------------------------------------------------------------------------------------------------
NET CASH USED FOR OPERATING ACTIVITIES (37,994) (36,834)
- - -------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (5,814) (3,496)
Investments in life insurance policies (398) (195)
- - -------------------------------------------------------------------------------------------------------------------
NET CASH USED FOR INVESTING ACTIVITIES (6,212) (3,691)
- - -------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings 301,108 98,948
Repayments of debt (256,439) (66,210)
Purchases of treasury stock (3) (13,325)
Dividends paid (1,481) (1,513)
Net financing activities of discontinued operations (400) (2,200)
- - -------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 42,785 15,700
- - -------------------------------------------------------------------------------------------------------------------
NET DECREASE IN CASH AND SHORT-TERM INVESTMENTS (1,421) (24,825)
CASH AND SHORT-TERM INVESTMENTS AT BEGINNING OF PERIOD 6,474 33,678
- - -------------------------------------------------------------------------------------------------------------------
CASH AND SHORT-TERM INVESTMENTS AT END OF PERIOD $ 5,053 $ 8,853
===================================================================================================================
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
DEL WEBB CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(IN THOUSANDS)
(UNAUDITED)
SIX MONTHS ENDED
DECEMBER 31,
- - -------------------------------------------------------------------------------------------------------------------
1994 1993
- - -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Reconciliation of net earnings to net cash used for operating activities:
Net earnings $ 11,916 $ 6,049
Allocation of non-cash costs to cost of sales, excluding interest 74,326 46,783
Amortization of capitalized interest included in cost of sales 12,567 7,458
Deferred compensation amortization 816 628
Depreciation and other amortization 2,500 2,168
Deferred income tax expense 5,373 2,705
Net change in homes in production (24,230) (22,312)
Land acquisitions (16,597) (15,026)
Lot development (71,132) (32,787)
Amenity development (33,843) (23,552)
Pre-acquisition costs (1,548) (2,385)
Net change in other assets and liabilities 2,556 (4,718)
Net operating activities of discontinued operations (698) (1,845)
- - -------------------------------------------------------------------------------------------------------------------
Net cash used for operating activities $ (37,994) $ (36,834)
===================================================================================================================
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
DEL WEBB CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Del Webb
Corporation and its subsidiaries ("Company"). In the opinion of management,
the accompanying unaudited consolidated financial statements contain all
adjustments (consisting of only normal recurring adjustments, primarily
eliminations of all significant intercompany transactions and accounts)
necessary to present fairly the financial position, results of operations
and cash flows for the periods presented.
At June 30, 1994 the Company classified the unamortized cost of its
vacation apartments (aggregating $16.6 million) as property and equipment
as a result of its intent to operate the apartments. At October 1, 1994 the
Company decided to return to marketing the apartments for sale as
individual units. Accordingly, the apartments were reclassified from
property and equipment to real estate inventories.
The Company's continuing operations include its communities, conventional
homebuilding operations and residential land development project. The
Company's communities are large-scale, master-planned residential
communities at which the Company controls all phases of the master plan
development process from land selection through the construction and sale
of homes. Within its communities, the Company is the exclusive developer of
homes. The Company's conventional homebuilding operations encompass the
construction and sale of homes in subdivisions. The Company's commercial
land development projects are accounted for as discontinued operations.
These consolidated financial statements should be read in conjunction with
the consolidated financial statements and the related disclosures contained
in the Company's Annual Report on Form 10-K for the year ended June 30,
1994, filed with the Securities and Exchange Commission.
In the Consolidated Statements of Cash Flows, the Company defines operating
communities as communities generating revenue through home closings.
Communities in the pre-operating stage are those not currently generating
home sales revenues.
The results of operations for the six months ended December 31, 1994 are
not necessarily indicative of the results to be expected for the full
fiscal year.
<TABLE>
<CAPTION>
(2) REAL ESTATE INVENTORIES
The components of real estate inventories are as follows:
In Thousands
----------------------------------------------------------------------------------------------------------
December 31, June 30, December 31,
1994 1994 1993
(Unaudited) (Unaudited)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Homes in production $ 124,019 $ 99,789 $ 87,909
Unamortized improvement and amenity costs 306,680 246,536 201,472
Unamortized capitalized interest 49,769 40,357 32,174
Land held for housing 219,843 210,700 127,321
Land held for future development or sale 62,982 65,231 67,736
----------------------------------------------------------------------------------------------------------
$ 763,293 $ 662,613 $ 516,612
==========================================================================================================
</TABLE>
At December 31, 1994 the Company had 204 completed homes (excluding models
and vacation apartments) and 474 homes under construction that were not
subject to a sales contract. These homes represented $14.1 million and
$15.3 million, respectively, of homes in production at December 31, 1994.
At December 31, 1993 the Company had 125 completed homes and 423 homes
under contstruction (representing $9.1 million and $8.2 million,
respectively, of homes in production) that were not subject to a sales
contract.
(3) NOTES PAYABLE, SENIOR AND SUBORDINATED DEBT
<TABLE>
<CAPTION>
Notes payable, senior and subordinated debt consists of the following:
In Thousands
----------------------------------------------------------------------------------------------------------
December 31, June 30, December 31,
1994 1994 1993
(Unaudited) (Unaudited)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Senior Notes, net $ 96,442 $ 96,098 $ 95,754
9 3/4% Senior Subordinated Debentures, net 96,642 96,436 96,231
9% Senior Subordinated Debentures, net 96,944 96,879 -
Subordinated Swiss Franc Bonds, net 12,724 12,704 12,683
Notes payable to banks under a senior credit
agreement and short-term lines of credit 63,850 18,000 13,000
Real estate and other notes 79,070 75,559 32,061
Development credit agreements for Sun City
Las Vegas - - 29,587
----------------------------------------------------------------------------------------------------------
$ 445,672 $ 395,676 $ 279,316
==========================================================================================================
</TABLE>
At December 31, 1994 the Company had $120 million and $11.1 million of
unused borrowing capacity under a $175 million unsecured revolving credit
facility and $20 million of short-term lines of credit, respectively. In
November 1994 the Company negotiated an amendment to its unsecured
revolving credit facility to increase the amount of the facility from $125
million to $175 million.
At December 31, 1994, under the most restrictive of the covenants in the
Company's debt agreements, $19.5 million of the Company's retained earnings
was available for payment of cash dividends and for the acquisition by the
Company of its common stock.
The Company does not trade in derivative financial instruments. It has two
derivative financial instruments for purposes other than trading.
The Company has a currency exchange agreement entered into with a major
bank in 1986 simultaneously with the issuance outside of the United States
of 50 million Subordinated Swiss Franc Bonds ($24 million) due February
1996. The agreement was entered into to eliminate the Company's exposure
to foreign currency fluctuations. As of December 31, 1994 the outstanding
Bonds and the currency exchange agreement have been reduced to 26.7
million Swiss Francs ($12.8 million). The estimated fair value at December
31, 1994 of the foreign currency exchange agreement reflects an unrealized
gain of $7.2 million, although this is more than offset by a $7.4 million
increase in the fair value over the book value of the subordinated Swiss
Franc Bonds.
The Company also has a interest rate swap agreement which calls for an
interest rate conversion with a notional amount of $20 million. This swap
agreement was entered into to manage the Company's interest rate risk. It
requires fixed interest payments on the notional amount at a rate of 10.5
percent annually until February 1996. The Company receives semi-annual
interest payments based on the six-month London interbank offered rate
(LIBOR) until February 1996. As a result of this agreement, the Company
incurred net interest of $555,000 for the six months ended December 31,
1994. A one percent decrease (increase) in the LIBOR would have resulted
in a $100,000 increase (decrease) in interest for the six-month period.
The estimated fair value at December 31, 1994 of the interest rate swap
agreement reflects an unrealized loss of $2.0 million.
<TABLE>
<CAPTION>
(4) INCOME TAXES
COMPONENTS OF INCOME TAX EXPENSE
The components of income tax expense are:
In Thousands
(Unaudited)
--------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
December 31, December 31,
--------------------------------------------------------------------------------------------------------
1994 1993 1994 1993
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Current:
Federal $ (547) $ 216 $ (92) $ 247
State 756 228 1,136 305
--------------------------------------------------------------------------------------------------------
209 444 1,044 552
--------------------------------------------------------------------------------------------------------
Deferred:
Federal 3,447 1,620 5,319 2,388
State (97) 206 54 317
--------------------------------------------------------------------------------------------------------
3,350 1,826 5,373 2,705
--------------------------------------------------------------------------------------------------------
Total $3,559 $2,270 $6,417 $3,257
========================================================================================================
</TABLE>
<TABLE>
<CAPTION>
(5) REVENUES AND COST OF SALES
The components of revenues and cost of sales are:
In Thousands (Unaudited)
----------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
December 31, December 31,
----------------------------------------------------------------------------------------------------------
1994 1993 1994 1993
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Home sales - communities $ 142,777 $ 106,851 $ 265,058 $ 178,262
Home sales - conventional homebuilding 27,967 12,562 59,959 24,362
Land sales and other 5,314 6,150 13,923 10,473
----------------------------------------------------------------------------------------------------------
$ 176,058 $ 125,563 $ 338,940 $ 213,097
==========================================================================================================
Cost of Sales:
Home sales - communities $ 111,423 $ 84,264 $ 208,322 $ 140,488
Home sales - conventional homebuilding 23,710 10,848 50,924 21,097
Land sales and other 4,262 4,920 12,054 8,266
----------------------------------------------------------------------------------------------------------
$ 139,395 $ 100,032 $ 271,300 $ 169,851
==========================================================================================================
</TABLE>
<TABLE>
<CAPTION>
(6) INTEREST
The following table shows the components of interest:
In Thousands
(Unaudited)
----------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
December 31, December 31,
----------------------------------------------------------------------------------------------------------
1994 1993 1994 1993
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest incurred $ 11,424 $ 7,561 $ 21,979 $ 14,949
Less capitalized interest 11,424 7,561 21,979 14,949
----------------------------------------------------------------------------------------------------------
Interest expense $ - $ - $ - $ -
==========================================================================================================
Amortization of capitalized interest
included in cost of sales $ 6,697 $ 4,516 $ 12,567 $ 7,458
==========================================================================================================
Unamortized capitalized interest included
in real estate inventories at period end $ 49,769 $ 32,174
==========================================================================================================
Interest income $ 107 $ 212 $ 230 $ 585
==========================================================================================================
</TABLE>
(7) REINCORPORATION
On November 3, 1994 the Company changed its state of incorporation from
Arizona to Delaware. In connection with this reincorporation, the common
stock changed from common stock without par value to common stock with a
par value of $.001 per share, which resulted in a consolidated balance
sheet reclassification within shareholders' equity from common stock to
additional paid-in capital. There was no impact on total shareholders'
equity as a result of the reincorporation.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
The following discussion of the results of operations and financial condition
should be read in conjunction with the accompanying consolidated financial
statements and notes thereto and the Company's Annual Report on Form 10-K for
the year ended June 30, 1994, filed with the Securities and Exchange Commission.
CONSOLIDATED FINANCIAL AND OPERATING DATA
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, CHANGE DECEMBER 31, CHANGE
- - --------------------------------------------------------------------------------------------------------------------------
1994 1993 AMOUNT PERCENT 1994 1993 AMOUNT PERCENT
- - --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATING DATA :
Number of net new orders:(1)
Sun City West 194 264 (70) (26.5%) 424 512 (88) (17.2%)
Sun City Tucson 99 80 19 23.8% 167 158 9 5.7%
Sun City Las Vegas 192 198 (6) (3.0%) 384 405 (21) (5.2%)
Sun City Palm Springs 85 65 20 30.8% 121 121 - -
Sun City Roseville(2) 116 N/A 116 N/A 280 N/A 280 N/A
Sun City Hilton Head(3) 59 N/A 59 N/A 59 N/A 59 N/A
Terravita(4) 89 92 (3) (3.3%) 217 92 125 135.9%
Coventry Homes 188 157 31 19.7% 370 331 39 11.8%
- - --------------------------------------------------------------------------------------------------------------------------
Total 1,022 856 166 19.4% 2,022 1,619 403 24.9%
==========================================================================================================================
Number of home closings:
Sun City West 346 321 25 7.8% 639 571 68 11.9%
Sun City Tucson 112 92 20 21.7% 208 155 53 34.2%
Sun City Las Vegas 200 206 (6) (2.9%) 425 356 69 19.4%
Sun City Palm Springs 81 78 3 3.8% 132 113 19 16.8%
Terravita(4) 89 N/A 89 N/A 156 N/A 156 N/A
Coventry Homes 188 105 83 79.0% 400 202 198 98.0%
- - --------------------------------------------------------------------------------------------------------------------------
Total 1,016 802 214 26.7% 1,960 1,397 563 40.3%
==========================================================================================================================
BACKLOG DATA :
Homes under contract at
December 31:
Sun City West 445 606 (161) (26.6%)
Sun City Tucson 242 271 (29) (10.7%)
Sun City Las Vegas 438 480 (42) (8.8%)
Sun City Palm Springs 151 133 18 13.5%
Sun City Roseville(2) 629 N/A 629 N/A
Sun City Hilton Head(3) 59 N/A 59 N/A
Terravita(4) 392 92 300 326.1%
Coventry Homes 368 340 28 8.2%
- - -----------------------------------------------------------------------------
Total 2,724(5) 1,922 802 41.7%
=============================================================================
Aggregate contract sales amount
(dollars in millions) $ 531(5) $ 310 $ 221 71.3%
=============================================================================
Average contract sales amount per
home (dollars in thousands) $ 195 $ 161 $ 34 21.1%
=============================================================================
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED FINANCIAL AND OPERATING DATA
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, CHANGE DECEMBER 31, CHANGE
- - -----------------------------------------------------------------------------------------------------------------------------------
1994 1993 AMOUNT PERCENT 1994 1993 AMOUNT PERCENT
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AVERAGE REVENUE PER
HOME CLOSING:
Sun City West $151,700 $139,800 $11,900 8.5% $149,100 $137,100 $12,000 8.8%
Sun City Tucson 163,900 155,600 8,300 5.3% 164,100 156,200 7,900 5.1%
Sun City Las Vegas 182,300 162,800 19,500 12.0% 177,400 154,900 22,500 14.5%
Sun City Palm Springs(2) 209,900 180,900 29,000 16.0% 204,900 182,200 22,700 12.5%
Terravita 207,300 N/A N/A N/A 212,800 N/A N/A N/A
Coventry Homes 148,800 119,600 29,200 24.4% 149,900 120,600 29,300 24.3%
Total weighted average 168,100 148,900 19,200 12.9% 165,800 145,000 20,800 14.3%
==================================================================================================================================
OPERATING STATISTICS AND
AVERAGES:
Cost of sales as a percentage of
revenues 79.2% 79.7% (0.5%) (0.6%) 80.0% 79.7% 0.3% 0.4%
Selling, general and
administrative expenses as a
percentage of revenues 15.0% 15.2% (0.2%) (1.3%) 14.5% 15.9% (1.4%) (8.8%)
Operating earnings as a
percentage of revenues 5.8% 5.2% 0.6% 11.5% 5.4% 4.4% 1.0% 22.7%
Ratio of home closings to
homes under contract in
backlog at beginning of period 37.4% 42.9% (5.5%) (12.8%) 73.6% 82.2% (8.6%) (10.5%)
==================================================================================================================================
<FN>
(1) Net of cancellations. The Company recognizes revenue at close of escrow.
(2) The Company began taking new home sales orders at Sun City Roseville in
May 1994.
(3) The Company began taking new home sales orders at Sun City Hilton Head
in November 1994.
(4) The Company began taking new home sales orders at Terravita in November
1993. Home closings at Terravita began in July 1994.
(5) A majority of this backlog is currently anticipated to result in revenues
in the next 12 months. However, a majority of the home sales orders
reflected in backlog at December 31, 1994 are contingent upon the
availability of financing for the customer, sale of the customer's existing
residence or other factors. Also, as a practical matter, the Company's
ability to obtain damages for breach of contract by a potential home buyer
is limited to retaining all or a portion of the deposit received. In the
six months ended December 31, 1994 and 1993, cancellations of home sales
orders as a percentage of new home sales orders written during the period
were 19.4 percent and 16.2 percent, respectively.
</TABLE>
RESULTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 1994 AND 1993
REVENUES.
(Dollars in Millions)
- - ------------------------------------------------------------------------------
Three Months Ended
December 31, Change
- - ------------------------------------------------------------------------------
1994 1993 Amount Percent
- - ------------------------------------------------------------------------------
$176.1 $125.6 $50.5 40.2%
The commencement of home closings at Terravita in July 1994 accounted for $18.4
million of the increase in revenues for the three months ended December 31, 1994
compared to the three months ended December 31, 1993. Increased home closings at
the Company's active adult communities and Coventry Homes, the Company's
conventional homebuilding operation, accounted for $6.2 million and $9.9
million, respectively, of the increase in revenues for the 1994 quarter compared
to the 1993 quarter. Increases in the average revenue per home closing at the
Company's active adult communities and Coventry Homes accounted for $11.3
million and $5.5 million, respectively, of the increase in revenues. These
increases in average revenues per home closing were partially due to sales price
increases implemented by the Company over the past 18 months and partially due
to changes in product mix.
COST OF SALES. The increase in cost of sales to $139.4 million in the 1994
quarter compared to $100.0 million in the 1993 quarter was primarily due to
increased home closings at Terravita, Coventry Homes, Sun City West and Sun City
Tucson. As a percentage of revenues, cost of sales decreased to 79.2 percent
for the 1994 quarter compared to 79.7 percent for the 1993 quarter. This
decrease was primarily due to sales price increases implemented by the Company
over the past 18 months and stabilization of construction costs. On a
period-to-period basis, cost of sales as a percentage of revenues will vary due
to, among other things, changes in product mix, differences between individual
communities, lot premiums, upgrades and extras, price increases, changes in
construction costs and changes in the amortization of capitalized interest and
other common costs.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Since a significant portion of
selling, general and administrative expenses are fixed, the increase in revenues
for the 1994 quarter resulted in a decrease in these expenses as a percentage of
revenues as compared to the 1993 quarter. Of the increase in total selling,
general and administrative expenses to $26.5 million in the 1994 quarter as
compared to $19.0 million for the 1993 quarter, $2.2 million was attributable to
higher sales and marketing expenses and $1.6 million was attributable to
increased commissions on the increased revenues. The balance of the increase was
attributable to a variety of general and administrative expenses.
INCOME TAX EXPENSE. The increase in income tax expense to $3.6 million in the
1994 quarter as compared to $2.3 million in the 1993 quarter was due to the
increase in operating earnings. The effective tax rate in both quarters was 35
percent.
NET NEW ORDER ACTIVITY AND BACKLOG. Net new orders increased 19.4 percent in the
1994 quarter as compared to the 1993 quarter. This increase was primarily
attributable to new sales orders at Sun City Roseville (at which the Company
began taking new sales orders in May 1994) and Sun City Hilton Head (at which
the Company began taking new sales orders in November 1994). Management believes
that the new order activity at these new communities may be due in part to
pent-up demand.
New orders at Sun City Hilton Head for the remainder of fiscal 1995 are
anticipated to be impacted by recent heavy rainfall, which has delayed
development activity and limited marketing accessibility to new lots. At Sun
City Roseville, high demand and the regulatory approval process, aggravated by
heavy rainfall, has resulted in erratic sales patterns that are anticipated to
continue for the forseeable future and result in minimal sales orders for the
quarter ending March 31, 1995. At both communities, the heavy rains have dalayed
construction activity for homes under contract; accordingly, the delivery of
homes at these communities is anticipated to be slower than would otherwise be
expected.
Net new orders at Terravita were 3.3 percent lower in the 1994 quarter than in
the 1993 quarter. Demand remains strong at this community, but lot availability
is expected to continue to cause fluctuations in net new orders on a
quarter-to-quarter basis.
Net new orders for Coventry Homes were 19.7 percent higher in the 1994 quarter
than in the 1993 quarter due to an increase in the number of operating
subdivisions. The decrease in net new orders at the Company's established active
adult communities was attributable to Sun City West, which had a 26.5 percent
decline in net new orders in the 1994 quarter compared to the 1993 quarter.
Management believes that increased interest rates and price increases
implemented by the Company over the past 18 months have generally softened
demand from the comparable period one year ago, and may continue to do so in the
future. Management also believes that net new orders at Sun City Palm Springs
continue to be adversely affected by the current Southern California real estate
market and the Southern California economy generally.
The number of homes under contract at December 31, 1994 was 41.7 percent higher
than at December 31, 1993. This increase was attributable to the new sales
orders at Sun City Roseville, Terravita (at which the Company began taking new
sales orders in November 1993) and Sun City Hilton Head.
SIX MONTHS ENDED DECEMBER 31, 1994 AND 1993
REVENUES.
(Dollars in Millions)
- - -------------------------------------------------------------------------------
Six Months Ended
December 31, Change
- - -------------------------------------------------------------------------------
1994 1993 Amount Percent
- - -------------------------------------------------------------------------------
$338.9 $213.1 $125.8 59.0%
The commencement of home closings at Terravita in July 1994 accounted for $33.2
million of the increase in revenues for the six months ended December 31, 1994
compared to the six months ended December 31, 1993. Increased home closings at
the Company's active adult communities and Coventry Homes accounted for $31.7
million and $23.9 million, respectively, of the increase in revenues for the
1994 period compared to the 1993 period. Increases in the average revenue per
home closing at the Company's active adult communities and Coventry Homes
accounted for $21.9 million and $11.7 million, respectively, of the increase in
revenues. These increases in average revenues per home closing were partially
due to sales price increases implemented by the Company over the past 18 months
and partially due to changes in product mix.
COST OF SALES. The increase in cost of sales to $271.3 million in the 1994
period compared to $169.9 million in the 1993 period was primarily due to
increased costs associated with increased home closings at all locations. The
Company also experienced an increase in its cost of sales as a percentage of
revenues from the 1993 period to the 1994 period, primarily reflecting the
impact of (i) increased amortization of capitalized interest to cost of sales
and (ii) decreased base housing margins at Sun City Tucson. Increased borrowings
and higher interest rates resulted in an increase in amortization of capitalized
interest to 4.6 percent of total cost of sales for the 1994 period compared to
4.4 percent for the 1993 period. Pricing strategies employed by the Company to
facilitate the completion of Sun City Tucson resulted in a decrease in base
housing margins at that community. See "Three Months Ended December 31, 1994 and
1993 -- Cost of Sales."
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Since a significant portion of
selling, general and administrative expenses are fixed, the increase in revenues
for the 1994 period resulted in a decrease in these expenses as a percentage of
revenues as compared to the 1993 period. Of the increase in total selling,
general and administrative expenses to $49.3 million in the 1994 period as
compared to $33.9 million for the 1993 period, $4.0 million was attributable to
higher sales and marketing expenses and $3.2 million was attributable to
increased commissions on the increased revenues. The balance of the increase was
attributable to a variety of general and administrative expenses.
INCOME TAX EXPENSE. The increase in income tax expense to $6.4 million in the
1994 period as compared to $3.3 million in the 1993 period was due to the
increase in operating earnings. The effective tax rate in both periods was 35
percent.
NET NEW ORDER ACTIVITY AND BACKLOG. Net new orders increased 24.9 percent in the
1994 period as compared to the 1993 period. The number of homes under contract
at December 31, 1994 was 41.7 percent higher than at December 31, 1993. These
increases were attributable to new sales orders at Sun City Roseville, Terravita
and Sun City Hilton Head. See "Three Months Ended December 31, 1994 and 1993 --
Net New Order Activity and Backlog."
Cancellations of home sales orders as a percentage of new home sales orders
written increased to 19.4 percent for the 1994 period compared to 16.2 percent
for the 1993 period. The increase is primarily attributable to Sun City
Roseville and Terravita, which experienced strong new order activity but higher
cancellation percentages than the Company's established active adult
communities. Substantially all of the cancellations at Sun City Roseville and
Terravita were replaced by new sales orders.
LIQUIDITY AND FINANCIAL CONDITION OF THE COMPANY
At December 31, 1994 the Company had $5.1 million of cash and short-term
investments and $120 million and $11.1 of unused borrowing capacity under its
$175 million unsecured revolving credit facility and $20 million of short-term
lines of credit, respectively.
In November 1994 the Company negotiated an amendment to its unsecured revolving
credit facility to increase the amount of the facility from $125 million to $175
million and thereby provide additional flexibility in the timing of future
development expenditures. Management believes the increased borrowing capacity,
when combined with existing cash and short-term investments and anticipated cash
flows from the Company's operating communities, conventional homebuilding
activities and residential land development project, should provide the Company
with adequate capital resources to fund the Company's currently anticipated
operating requirements for fiscal 1995.
The Company's unsecured revolving credit facility and the indentures for the
Company's publicly held debt contain restrictions which could, depending on the
circumstances, affect the Company's ability to borrow in the future. If the
Company at any time is not successful in obtaining sufficient capital to fund
its then planned development and expansion expenditures, some or all of its
projects may be significantly delayed. Any such delay could result in cost
increases and may adversely affect the Company's results of operations.
The cash flow for each of the Company's communities can differ substantially
from reported earnings, depending on the status of the development cycle. The
initial years of development or expansion require significant cash outlays for,
among other things, land acquisition, obtaining master plan and other approvals,
construction of amenities (including golf courses and recreation centers), model
homes, sales and administration facilities, major roads and certain utilities
and general landscaping and interest. Since these costs are capitalized, this
can result in income reported for financial statement purposes during those
initial years significantly exceeding cash flow. However, after the initial
years of development or expansion, when these expenditures are made, cash flow
can significantly exceed income reported for financial statement purposes, as
costs of sales includes amortization of charges for substantial amounts of
previously expended costs.
During the six months ended December 31, 1994 the Company generated $83.6
million of net cash from community sales activities, used $38.9 million of cash
for land and lot and amenity development at operating communities, paid $37.2
million for costs related to communities in the pre-operating stage, used $9.0
million of cash for conventional homebuilding operations and used $36.5 million
of cash for other operating activities. Included in cash used for other
operating activities was $1.0 million paid for income taxes. Due to the
exhaustion of tax net operating losses, the Company resumed making Federal
estimated income tax payments in the three months ended December 31, 1994.
The Company believes that, of the $372.3 million of cash spent by the Company
during the six months ended December 31, 1994 for land acquisitions, lot and
amenity development, home construction and other operating activities,
approximately $53.6 million was to some extent discretionary as to timing and
precedes the actual construction of homes from which cash can be generated upon
closing of home sale contracts. This $53.6 million was comprised of $37.2
million related to projects in the pre-operating stage and $16.4 million for
land acquisitions and amenity development at operating communities.
At December 31, 1994, under the most restrictive of the covenants in the
Company's debt agreements, $19.5 million of the Company's retained earnings was
available for payment of cash dividends and for the acquisition by the Company
of its common stock.
PROPOSED ACCOUNTING STANDARD
The Financial Accounting Standards Board has issued an exposure draft of a
proposed accounting standard entitled "Accounting for the Impairment of Long
Lived Assets" and has had discussions with respect to the application of the
proposed standard to homebuilders. The Company believes that the final standard
may be different from the exposure draft. Accordingly, the Company cannot
predict the impact, if any, that such a final standard might have on the
Company's financial position or results of operations.
PART II. OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of the shareholders of the Company was held on November 2,
1994. The shareholders voted on the election of three directors. Nominated for
election were three existing directors: Robert Bennett, Hugh F. Culverhouse, Jr.
and C. Anthony Wainwright. The shareholders voted to elect all three nominees,
voting as follows:
Votes For Votes Withheld
---------- --------------
Robert Bennett 12,120,559 392,467
Hugh F. Culverhouse, Jr. 12,120,473 392,514
C. Anthony Wainwright 12,099,974 405,812
The shareholders also voted to approve the reincorporation of the Company in
Delaware as follows: 9,383,629 votes for, 1,429,616 votes against and 86,365
votes withheld. Shares not voted were 1,603,831.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 10.0 Third Amendment to Revolving Loan Agreement by and
among Del Webb Corporation and Bank of America
National Trust and Savings Association dated
November 29, 1994.
Exhibit 27.0 Financial Data Schedule
(b) The Company did not file any reports on Form 8-K during the period
covered by this report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DEL WEBB CORPORATION
(REGISTRANT)
Date: February 6, 1995 /s/ Philip J. Dion
---------------- -----------------------------------------
Philip J. Dion
Chairman and Chief Executive Officer
Date: February 6, 1995 /s/ John A. Spencer
---------------- -----------------------------------------
John A. Spencer
Senior Vice President and
Chief Financial Officer
THIRD AMENDMENT TO REVOLVING LOAN AGREEMENT
This Third Amendment to the Revolving Loan Agreement ("Third Amendment") is
entered into as of November 29, 1994 by and among DEL WEBB CORPORATION, a
Delaware corporation, as successor in interest to Del Webb Corporation, an
Arizona corporation ("Borrower"), each bank whose name is set forth on the
signature pages of this Third Amendment (collectively, the "Banks" and
individually a "Bank"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, a national banking association (the "Agent"). This Third Amendment
is one of the Loan Documents referred to in the Loan Agreement defined below.
All terms and agreements set forth in the Loan Agreement which are generally
applicable to the Loan Documents shall apply to this Third Amendment.
Capitalized terms not otherwise defined herein shall have the meanings given
them in the Loan Agreement.
RECITALS
A. Borrower, the Banks and the Agent have previously made and entered into
that certain Revolving Loan Agreement, dated as of March 11, 1994, as amended by
(i) that certain First Amendment to Revolving Loan Agreement, dated as of July
1, 1994, and (ii) that certain Second Amendment to Revolving Loan Agreement,
dated as of August 10, 1994 (as amended, the "Loan Agreement"), pursuant to
which the Banks agreed to make revolving loans to Borrower in the original
aggregate principal amount of up to $125,000,000.00 (the "Loan"). The Loan is
evidenced by the Loan Agreement and the various Line A Notes and Line B Notes
executed by Borrower in favor of the Banks.
B. Borrower has requested that an additional $50,000,000 be made available
as part of the Line A Commitment and that certain other modifications and
amendments be made to the Loan Agreement and, subject to the terms and
conditions contained herein, the Banks and the Agent have agreed to such
increase and such modifications and amendments, as more fully set forth below.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Borrower, the Banks and the Agent
hereby agree as follows:
1. Amendments to Loan Agreement.
1.1 Section 1.1. Section 1.1 of the Loan Agreement is amended as follows:
(a) The definition of "Current Operating Projects" is amended so that, in
the first sentence thereof, the word "and" immediately prior to "(i)" is deleted
and replaced by ",", and the following language is then added immediately before
the period at the end of such first sentence:
"and (j) Del E. Webb Development Co., L.P.'s approximately 4,300 acre
residential community development located near Austin, Texas and commonly
known as Sun City Georgetown, (k) Del Webb Communities, Inc.'s
approximately 550 acre residential community development located in
Henderson, Nevada and commonly known as MacDonald Ranch and (l) Del Webb
Communities, Inc.'s approximately 5,500 acre residential community
development located near Hilton Head Island, South Carolina and commonly
known as Sun City Hilton Head."
(b) The definition of "Line A Commitment" is restated in its entirety to
read as follows:
"Line A Commitment" means, subject to Sections 2.4 and 2.5,
$97,000,000. The respective Pro Rata Shares of the Banks with respect to
the Line A Commitment are set forth in Schedule 1.1."
1.2 Section 3.3. The final sentence of Section 3.3 of the Loan Agreement is
amended to read as follows:
"Should the Commitments increase or reduce during such Quarterly
Period, a refund or additional payment reflecting such increase or
reduction shall be made by Borrower (in the case of an increase) or
credited to Borrower (in the case of a reduction) on the next succeeding
Quarterly Payment Date or, if applicable, the Maturity Date."
1.3 Section 6.13. The table in Section 6.13 of the Loan Agreement is
amended as follows:
"Period Ratio
------- -----
Closing Date through
June 30, 1994 2.65:1.00
July 1, 1994 through
March 31, 1996 2.75:1.00
April 1, 1996 through
June 30, 1996 2:35:1.00
July 1, 1996 and
thereafter 2.15:1.00"
1.4 Section 6.14. The table in Section 6.14 of the Loan Agreement is
amended as follows:
"Period Ratio
------- -----
Closing Date through
June 30, 1994 1.30:1.00
July 1, 1994 through
June 30, 1995 1.40:1.00
July 1, 1995 through
March 31, 1996 1.35:1.00
April 1, 1996 through
June 30, 1996 1.20:1.00
July 1, 1996 and
thereafter 1.10:1.00"
1.5 Section 6.15. Section 6.15 of the Loan Agreement is amended to replace
the phrase "(b) 0.70:1.00 for the Fiscal Year ending June 30, 1995 or" contained
therein to instead read "(b) 0.50:1.00 for the Fiscal Year ending June 30, 1995
or".
1.6 Schedule 1.1. Schedule 1.1 (Bank Group Commitments) to the Loan
Agreement is amended and restated in its entirety in the schedule attached to
this Third Amendment as Annex I.
2. Additional Advance Fee. Borrower agrees to pay to the Agent for the
respective accounts of the Banks, pro rata, according to their Pro Rata Share of
the Commitments (giving effect to the Adjusting Purchase Payments), an
Additional Advance Fee of $50,174.
3. Adjusting Purchase Payments. The Agent shall notify the Banks on the
first Banking Day that the conditions specified in Sections 5(a)-5(f) hereof
have been satisfied (the "Notice"). On the following Banking Day certain of the
Banks shall purchase, and certain of the Banks shall sell, to one another, the
percentage interests in the Commitments as reflected in Annex II hereto, in
order to reallocate the then outstanding Advances under the Notes among the
Banks to correspond to the revised Pro Rata Shares of the Banks specified in
Annex I hereto. The applicable purchase price payments are specified on Annex II
hereto and referred to herein as the "Adjusting Purchase Payments". The
Adjusting Purchasing Payments shall be made to the Agent by the applicable
purchasing Banks by Federal Reserve wire transfer initiated by the payor no
later than 9:00 a.m. New York time on the Banking Day following the Notice. Upon
receipt of all such payments, the Agent shall promptly send appropriate portions
thereof to the selling Banks by Federal Reserve wire transfer. The new Pro Rata
Shares shall become effective after the close of business on the day of transfer
of such funds.
4. Borrower's Representations and Warranties. Borrower hereby represents
and warrants that except as previously disclosed to the Banks in writing, all of
the representations and warranties contained in the Loan Documents are true and
correct on and as of the date of this Third Amendment as though made on that
date and after giving effect to this Third Amendment no Event of Default shall
be continuing.
5. Conditions Precedent. The effectiveness of this Third Amendment is
conditioned upon the satisfaction by Borrower of each of the following
conditions on or before December 15, 1994:
(a) Borrower shall have delivered or caused to be delivered to the
Agent executed original counterparts of this Third Amendment and Exhibit
"A" hereto, sufficient in number for distribution to the Agent, the Banks
and Borrower;
(b) Borrower shall have delivered to the Agent executed original
replacement Line A Notes and Line B Notes, for each Bank, in the forms of
Exhibit "B" and Exhibit "C" hereto. Such replacement notes shall reflect
the increase in the Line A Commitment herein as well as the alteration
of the Pro Rata Share of each Bank reflected on Annex I hereto;
(c) Borrower shall have paid the Additional Advance Fee required in
Section 2 hereof;
(d) The Agent shall have received from Borrower and each Guarantor
Subsidiary such documentation as may be required to establish the authority
of Borrower and each Guarantor Subsidiary to execute, deliver and perform
any of the Loan Documents to which it is a Party, including, without
limitation, this Third Amendment and the replace- ment Line A Notes and
Line B Notes in the case of Borrower, and the Guarantors' Consent (Exhibit
"A" hereto) in the case of each Guarantor Subsidiary. Such documenta- tion
shall include certified corporate resolutions, incumbency certificates, and
such other certificates or documents as the Agent shall reasonably require;
(e) The Agent shall have received a written legal opinion of
counsel(s) to Borrower and each Guarantor, in form and substance
satisfactory to the Agent, regarding the execution, delivery, performance
and enforceability of this Third Amendment, the Guarantors' Consent hereto
and the replacement Line A Notes and Line B Notes;
(f) The Agent shall have received a written certification from a
Responsible Official of Borrower that Borrower and its Subsidiaries are in
compliance with all the terms and provisions of the Loan Documents and
after giving effect to this Third Amendment no Default or Event of Default
shall be continuing;
and the satisfaction by the Banks of the following condition:
(g) The applicable Banks shall have made the Adjusting Purchase
Payments as specified in Section 3 hereof.
6. Return of Cancelled Notes to Borrower. Upon the effectiveness of this
Third Amendment in accordance herewith, including the delivery by Borrower of
all documents required underSection 5 hereof, the Banks shall return the Line A
Notes and Line B Notes that have been replaced pursuant to Section 5(b) hereof
to Borrower, in each case marked "Cancelled."
7. Amendment to Other Loan Documents. Each of the Loan Documents is hereby
amended such that all references to the Loan Agreement contained therein shall
be deemed to be made with respect to the Loan Agreement as amended hereby. Each
of the Loan Documents are hereby further amended such that any reference
contained therein to any document amended hereby shall be deemed to be made with
respect to such document as amended hereby. Each reference to Loan Documents
generally shall be deemed to include this Third Amendment.
8. Loan Documents in Full Force and Effect. Except as modified hereby, the
Loan Documents remain in full force and effect.
9. Effective Dates. Unless otherwise specified herein, and subject to the
satisfaction of all conditions specified in Section 5, each amendment and
modification identified herein shall be deemed effective as of the date of this
Third Amendment, provided that the changes to the Pro Rata Shares of the Banks
identified on Annex I hereto shall be deemed effective on the date of the
Adjusting Purchase Payments described in Section 3 of this Third Amendment.
10. Governing Law. This Third Amendment shall be governed by, and construed
in accordance with, the Laws of the State of California.
11. Severability. If any provision of this Third Amendment is held invalid
or unenforceable by any court of competent jurisdiction, such holding shall not
invalidate or render unenforceable any other provision hereof.
12. Counterparts. This Third Amendment may be executed in counterparts and
any party may execute any counterpart, each of which shall be deemed to be an
original and all of which, taken together, shall be deemed to be one and the
same document. The execution hereof by any parties shall not become effective
until this Third Amendment, and Exhibit "A" hereto, is executed and delivered by
all parties hereto and thereto.
13. Prior Agreements. This Third Amendment contains the entire agreement
between Borrower, the Banks and the Agent with respect to the subject matter
hereof, and all prior negotiations, understandings, and agreements with respect
thereto are superseded by this Third Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
be duly executed as of the date first above written.
"Borrower"
DEL WEBB CORPORATION,
a Delaware corporation
By: /s/ Donald V. Mickus
__________________________________
Donald V. Mickus
Vice President, Treasurer
and Secretary
"Agent"
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ Daniel G. Farthing
-----------------------------------
Daniel G. Farthing
Vice President
"Banks"
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ Carol Smith
-----------------------------------
Carol Smith
Vice President
BANK ONE, ARIZONA, NA,
a national banking association
By: /s/ Deborah L. Rozman
__________________________________
Deborah L. Rozman
Vice President
THE FIRST NATIONAL BANK OF BOSTON,
a national banking association
By: /s/ Paul F. DiVito
__________________________________
Paul F. DiVito
Vice President
GUARANTY FEDERAL BANK, F.S.B.
By: /s/ Richard Thompson
__________________________________
Richard Thompson
Vice President
CREDIT LYONNAIS CAYMAN ISLAND BRANCH
By: /s/ Thierry F. Vincent
__________________________________
Thierry F. Vincent
Authorized Signatory
CREDIT LYONNAIS LOS ANGELES BRANCH
By: /s/ Thierry F. Vincent
__________________________________
Thierry F. Vincent
Vice President
NATIONSBANK OF SOUTH CAROLINA, N.A.,
a national banking association
By: /s/ Robert L. Whittemore
__________________________________
Robert L. Whittemore
Vice President
EXHIBIT "A"
GUARANTORS' CONSENTS
The undersigned do each hereby (a) consent to that certain Third Amendment
to Revolving Loan Agreement dated as of November 29, 1994, by and among Del Webb
Corporation ("Borrower"), the Banks named therein, and Bank of America National
Trust and Savings Association, as Agent, including the increase of $50,000,000
in the Line A Commitment contained therein and (b) reaffirm (i) their respective
obligations under that certain Subsidiary Guaranty, dated as of March 11, 1994,
and (ii) that the Subsidiary Guaranty remains in full force and effect and that,
without limitation, any indebtedness of Borrower represented by the $50,000,000
increase in the Line A Commitment constitutes "Guarantied Obligations"
thereunder.
Dated: November 29, 1994
Del Webb California Corp.,
an Arizona corporation
By: /s/ Donald V. Mickus
__________________________________
` Donald V. Mickus
Treasurer
Del Webb Commercial Properties
Corporation, an Arizona corporation
By: /s/ Donald V. Mickus
__________________________________
Donald V. Mickus
Treasurer
Del Webb Communities, Inc.,
an Arizona corporation
By: /s/ Donald V. Mickus
__________________________________
Donald V. Mickus
Treasurer
Del Webb Home Construction, Inc.,
an Arizona corporation
By: /s/ Donald V. Mickus
__________________________________
Donald V. Mickus
Treasurer
Del Webb Lakeview Corporation,
an Arizona corporation
By: /s/ Donald V. Mickus
__________________________________
Donald V. Mickus
Treasurer
Del Webb's Coventry Homes of Nevada,
Inc., an Arizona corporation
(formerly known as Del Webb of
Nevada, Inc.)
By: /s/ Donald V. Mickus
__________________________________
Donald V. Mickus
Treasurer
Del Webb's Coventry Homes
Construction Co., an Arizona
corporation
By: /s/ Donald V. Mickus
__________________________________
Donald V. Mickus
Treasurer
Del Webb's Coventry Homes, Inc.,
an Arizona corporation
By: /s/ Donald V. Mickus
__________________________________
Donald V. Mickus
Treasurer
Del Webb's Coventry Homes Construction
of Tucson Co., an Arizona corporation
By: /s/ Donald V. Mickus
__________________________________
Donald V. Mickus
Treasurer
Del Webb's Coventry Homes of Tucson,
Inc., an Arizona corporation
By: /s/ Donald V. Mickus
__________________________________
Donald V. Mickus
Treasurer
Del E. Webb Cactus Development Corp.,
an Arizona corporation
By: /s/ Donald V. Mickus
__________________________________
Donald V. Mickus
Treasurer
Del E. Webb Development Co., L.P.,
a Delaware limited partnership
By: Del Webb Communities, Inc.,
general partner
By: /s/ Donald V. Mickus
__________________________________
Donald V. Mickus
Treasurer
Del E. Webb Foothills Corporation,
an Arizona corporation
By: /s/ Donald V. Mickus
__________________________________
Donald V. Mickus
Treasurer
Del E. Webb Glen Harbor Development
Corporation, an Arizona corporation
By: /s/ Donald V. Mickus
__________________________________
Donald V. Mickus
Treasurer
Del E. Webb Spring Creek Corporation,
a Colorado corporation
By: /s/ Donald V. Mickus
__________________________________
Donald V. Mickus
Treasurer
Fairmount Mortgage, Inc.,
an Arizona corporation
By: /s/ Richard W. Day
__________________________________
Richard W. Day
Treasurer
Glen Harbor Joint Venture, an Arizona
general partnership
By: Del E. Webb Glen Harbor
Development Corporation,
general partner
By: /s/ Donald V. Mickus
__________________________________
Donald V. Mickus
Treasurer
Terravita Corp.,
an Arizona corporation
By: /s/ Donald V. Mickus
__________________________________
Donald V. Mickus
Treasurer
Terravita Home Construction Co.,
an Arizona corporation
By: /s/ Donald V. Mickus
__________________________________
Donald V. Mickus
Treasurer
EXHIBIT B
LINE A NOTE
$________________ _________________, 1994
Los Angeles, California
FOR VALUE RECEIVED, the undersigned promises to pay to the order of
_______________________________________________ (the "Bank"), the principal
amount of _________________________ ________________________ AND NO/100 DOLLARS
($________________) or such lesser aggregate amount of Advances as may be made
by the Bank with respect to the Line A Commitment under the Loan Agreement
referred to below, together with interest on the principal amount of each
Advance made hereunder and remaining unpaid from time to time from the date of
each such Advance until the date of payment in full, payable as hereinafter set
forth.
Reference is made to the Revolving Loan Agreement dated as of March 11,
1994, by and among the undersigned, as Borrower, the Banks which are parties
thereto, and Bank of America National Trust and Savings Association, as Agent
for the Banks (as amended, the "Loan Agreement"). Terms defined in the Loan
Agreement and not otherwise defined herein are used herein with the meanings
given those terms in the Loan Agreement. This is one of the Line A Notes
referred to in the Loan Agreement, and any holder hereof is entitled to all of
the rights, remedies, benefits and privileges provided for in the Loan Agreement
as originally executed or as it may from time to time be supplemented, modified
or amended. The Loan Agreement, among other things, contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
upon the terms and conditions therein specified.
The principal indebtedness evidenced by this Line A Note shall be payable
as provided in the Loan Agreement and in any event on the Maturity Date.
Interest shall be payable on the outstanding daily unpaid principal amount
of Advances from the date of each such Advance until payment in full and shall
accrue and be payable at the rates and on the dates set forth in the Loan
Agreement both before and after default and before and after maturity and
judgment, with interest on overdue principal and interest to bear interest at
the rate set forth in Section 3.7 of the Loan Agreement, to the fullest extent
permitted by applicable Law.
Each payment hereunder shall be made to the Agent at the Agent's Office for
the account of the Bank in immediately available funds not later than 11:00 a.m.
(San Francisco time) on the day of payment (which must be a Banking Day). All
payments received after 11:00 a.m. (San Francisco time) on any particular
Banking Day shall be deemed received on the next succeeding Banking Day. All
payments shall be made in lawful money of the United States of America.
The Bank shall use its best efforts to keep a record of Advances made by it
and payments received by it with respect tothis Line A Note, and such record
shall be presumptive evidence of the amounts owing under this Line A Note.
The undersigned hereby promises to pay all costs and expenses of any
rightful holder hereof incurred in collecting the undersigned's obligations
hereunder or in enforcing or attempting to enforce any of such holder's rights
hereunder, including reasonable attorneys' fees and disbursements, whether or
not an action is filed in connection therewith.
The undersigned hereby waives presentment, demand for payment, dishonor,
notice of dishonor, protest, notice of protest and any other notice or
formality, to the fullest extent permitted by applicable Laws.
This Line A Note shall be delivered to and accepted by the Bank in the
State of California, and shall be governed by, and construed and enforced in
accordance with, the local Laws thereof.
This Line A Note replaces, amends and restates that certain Line A Note,
dated as of March 11, 1994 in the principal amount of $______________ heretofore
delivered by the undersigned to the Bank pursuant to the Loan Agreement.
DEL WEBB CORPORATION, a Delaware
corporation
By: ____________________________________
Donald V. Mickus
Vice President, Treasurer
and Secretary
EXHIBIT C
LINE B NOTE
$________________ _________________, 1994
Los Angeles, California
FOR VALUE RECEIVED, the undersigned promises to pay to the order of
_____________________________________________ (the "Bank"), the principal amount
of _______________________ ________________ AND NO/100 DOLLARS
($___________________) or such lesser aggregate amount of Advances as may be
made by the Bank with respect to the Line B Commitment under the Loan Agreement
referred to below, together with interest on the principal amount of each
Advance made hereunder and remaining unpaid from time to time from the date of
each such Advance until the date of payment in full, payable as hereinafter set
forth.
Reference is made to the Revolving Loan Agreement dated as of March 11,
1994, by and among the undersigned, as Borrower, the Banks which are parties
thereto, and Bank of America National Trust and Savings Association, as Agent
for the Banks (as amended, the "Loan Agreement"). Terms defined in the Loan
Agreement and not otherwise defined herein are used herein with the meanings
given those terms in the Loan Agreement. This is one of the Line B Notes
referred to in the Loan Agreement, and any holder hereof is entitled to all of
the rights, remedies, benefits and privileges provided for in the Loan Agreement
as originally executed or as it may from time to time be supplemented, modified
or amended. The Loan Agreement, among other things, contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
upon the terms and conditions therein specified.
The principal indebtedness evidenced by this Line B Note shall be payable
as provided in the Loan Agreement and in any event on the Maturity Date.
Interest shall be payable on the outstanding daily unpaid principal amount
of Advances from the date of each such Advance until payment in full and shall
accrue and be payable at the rates and on the dates set forth in the Loan
Agreement both before and after default and before and after maturity and
judgment, with interest on overdue principal and interest to bear interest at
the rate set forth in Section 3.7 of the Loan Agreement, to the fullest extent
permitted by applicable Law.
Each payment hereunder shall be made to the Agent at the Agent's Office for
the account of the Bank in immediately available funds not later than 11:00 a.m.
(San Francisco time) on the day of payment (which must be a Banking Day). All
payments received after 11:00 a.m. (San Francisco time) on any particular
Banking Day shall be deemed received on the next succeeding Banking Day. All
payments shall be made in lawful money of the United States of America.
The Bank shall use its best efforts to keep a record of Advances made by it
and payments received by it with respect tothis Line B Note, and such record
shall be presumptive evidence of the amounts owing under this Line B Note.
The undersigned hereby promises to pay all costs and expenses of any
rightful holder hereof incurred in collecting the undersigned's obligations
hereunder or in enforcing or attempting to enforce any of such holder's rights
hereunder, including reasonable attorneys' fees and disbursements, whether or
not an action is filed in connection therewith.
The undersigned hereby waives presentment, demand for payment, dishonor,
notice of dishonor, protest, notice of protest and any other notice or
formality, to the fullest extent permitted by applicable Laws.
This Line B Note shall be delivered to and accepted by the Bank in the
State of California, and shall be governed by, and construed and enforced in
accordance with, the local Laws thereof.
This Line B Note replaces, amends and restates that certain Line B Note,
dated as of March 11, 1994 in the principal amount of $______________ heretofore
delivered by the undersigned to the Bank pursuant to the Loan Agreement.
DEL WEBB CORPORATION, a Delaware
corporation
By: ____________________________________
Donald V. Mickus
Vice President, Treasurer
and Secretary
ANNEX I
DEL WEBB CORPORATION
BANK GROUP COMMITMENTS
Line "A" Line "B" Total
Syndicate Bank Pro Rata Share $97,000,000 $78,000,000 $175,000,000
- - -------------- -------------- ----------- ----------- ------------
Bank of America
NT & SA 38.571429% 37,414,286 30,085,714 67,500,000
Bank One - Arizona 14.285714% 13,857,143 11,142,857 25,000,000
The First National
Bank of Boston 14.285714% 13,857,143 11,142,857 25,000,000
Guaranty Federal,
F.S.B. 14.285714% 13,857,143 11,142,857 25,000,000
Credit Lyonnais 7.142857% 6,928,571 5,571,429 12,500,000
NationsBank of
South Carolina,
N.A. 11.428571% 11,085,714 8,914,286 20,000,000
Totals 100.000000% $97,000,000 $78,000,000 $175,000,000
<TABLE>
<CAPTION>
ANNEX II
[ADJUSTING PURCHASE PAYMENTS]
Aggregate Principal Balance of Notes as of November 29, 1994 - $35,000,000.
Old Share of New Share of
Purchasing Aggregate Old Aggregate New Purchase Sales Price
Banks Principal Pro-Rata Share Principal Pro-Rata Share Price to Pay to Receive
- - ------------ ------------ -------------- ------------ -------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
The First
National Bank of
Boston $ 4,200,000 12.0% $ 5,000,000 14.285714% $ 800,000
Guaranty
Federal, F.S.B. 4,200,000 12.0% 5,000,000 14.285714% 800,000
NationsBank of
South Carolina
N.A. 3,500,000 10.0% 4,000,000 11.428571% 500,000
Selling Banks
- - -------------
Bank of America
NT & SA 14,000,000 40.0% 13,500,000 38.571429% $ 500,000
Bank One -
Arizona 5,600,000 16.0% 5,000,000 14.285714% 600,000
Credit Lyonnais 3,500,000 10.0% 2,500,000 7.142857% 1,000,000
TOTAL: $35,000,000 100.0% $35,000,000 100.000000% $ 2,100,000 $ 2,100,000
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM THE CONSOLIDATED
BALANCE SHEET AS OF DECEMER 31, 1994 AND THE
CONSOLIDATED STATEMENT OF EARNINGS FOR THE SIX
MONTHS ENDED DECEMBER 31, 1994 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> JUL-01-1994
<PERIOD-END> DEC-31-1994
<PERIOD-TYPE> 6-MOS
<EXCHANGE-RATE> 1
<CASH> 5,053
<SECURITIES> 0
<RECEIVABLES> 8,688
<ALLOWANCES> 0
<INVENTORY> 763,293
<CURRENT-ASSETS> 0
<PP&E> 38,430
<DEPRECIATION> 15,228
<TOTAL-ASSETS> 840,376
<CURRENT-LIABILITIES> 0
<BONDS> 445,672
<COMMON> 16
0
0
<OTHER-SE> 212,785
<TOTAL-LIABILITY-AND-EQUITY> 840,376
<SALES> 337,851
<TOTAL-REVENUES> 338,940
<CGS> 271,279
<TOTAL-COSTS> 271,300
<OTHER-EXPENSES> 49,307
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 18,333
<INCOME-TAX> 6,417
<INCOME-CONTINUING> 11,916
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,916
<EPS-PRIMARY> 0.79
<EPS-DILUTED> 0
</TABLE>
