<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
----------------------------------
November 15, 1999 (November 5, 1999)
------------------------------------------------
Date of Report (Date of earliest event reported)
THE PRESLEY COMPANIES*
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-18001 33-0864902
- --------------------------------------------------------------------------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification Number)
19 Corporate Plaza, Newport Beach, California 92660
---------------------------------------------------
(Address of principal executive offices) (zip code)
(949) 640-6400
--------------------------------------------------
Registrant's telephone number, including area code
- ----------------
* The Presley Companies, a Delaware corporation ("Old Presley"), on November
11, 1999 merged with and into its wholly owned subsidiary, Presley Merger Sub,
Inc., a Delaware corporation ("New Presley") with New Presley being
the surviving corporation and changing its name to "The Presley Companies."
On that date, New Presley became the successor registrant to Old Presley.
This current report on Form 8-K is filed by New Presley, pursuant to a letter
from the office of the Chief Counsel, Division of Corporation Finance, of the
Securities and Exchange Commission (the "SEC") dated October 8, 1999 (the
"SEC Letter") in response to an interpretative request of Old Presley. In
accordance with the SEC Letter, this Form 8-K is filed, in lieu of filing a
registration statement on Form 8-A, to evidence that status of New Presley as
successor registrant to Old Presley under Section 12(b) of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), upon the consummation of the
merger (the "Merger"), which occurred on November 11, 1999, and to register the
common stock, par value $.01 per share of New Presley ("New Presley Common
Stock") as the successor equity security of the Series A Common Stock, par
value $.01 per share of Old Presley, under Section 12(b).
<PAGE> 2
Item 1. Not Applicable.
Item 2. Acquisition or Disposition of Assets.
On November 5, 1999, The Presley Companies ("Presley") through its
subsidiaries and limited liability companies Presley Homes, WLPC, Inc. and PH
Institutional Ventures purchased substantially all of the real estate and
related assets of William Lyon Homes, pursuant to the Purchase Agreement and
Escrow Instructions, dated as of October 7, 1999, with William Lyon Homes,
William Lyon and William H. Lyon.
The real estate assets purchased from William Lyon Homes consist of
9 properties located in Northern California and 9 properties located in Southern
California. The properties are all entitled. Generally, "entitled" land has a
development agreement and/or vesting tentative map, or a final recorded plat or
map from the appropriate county or city government. Development agreements and
vesting tentative maps generally provide for the right to develop the land in
accordance with the provisions of the development agreement or vesting tentative
map unless an issue arises concerning health, safety or welfare. The non real
estate assets consist of machinery, land deposits, receivables, cash, equipment,
computers, furniture, work force in place, corporate names, customer base,
information base, housing plans, prepaid office rents and club memberships.
The total purchase price consisted of approximately $43 million in cash
and the assumption of substantially all of the liabilities of William Lyon
Homes. The purchase price was determined based on the value as of December 31,
1998 of the real property and related assets acquired. The parties intended that
these assets, together with all income, receivables, escrow and other proceeds,
purchase deposits, cash and other assets earned or received from any sale of any
of these assets, including any assets acquired with sales proceeds, in the
ordinary course of business since January 1, 1999 and through November 5, 1999
would inure to the buyers. These amounts are to be net of any amounts that have
been used to pay or satisfy land acquisition or development costs, capital
expenditures, principal or interest on indebtedness, accounts payable, accrued
liabilities, employee wages and benefits, taxes, and other liabilities and
operating expenses existing on December 31, 1998 and incurred in the ordinary
course of business. The cash portion of the purchase price is subject to
adjustment. Ernst & Young LLP will complete a review and deliver to the parties
its final determination of any adjustment to the purchase price on or before
December 4, 1999. Presley funded the asset purchase through borrowings from its
existing working capital facility and the assumption of existing indebtedness on
certain real estate projects that were acquired. The purchase of the assets was
negotiated by a Special Committee of independent directors of Presley.
William Lyon Homes is owned by William Lyon and William H. Lyon.
William Lyon is the Chairman of the Board of The Presley Companies. William Lyon
and his affiliate own approximately 49.9% of the outstanding common stock of The
Presley Companies.
Items 3 and 4. Not Applicable.
Item 5. Other Events.
On November 5, 1999, The Presley Companies issued a press release, a
copy of which is attached hereto as Exhibit 99.1 announcing the closing of the
asset purchase and the approval by a majority of the outstanding Series A
Common Stock and Series B Common Stock, voting together as a class, of the
Certificate of Ownership and Merger, pursuant to which The Presley Companies
merged with and into its wholly-owned subsidiary Presley Merger Sub, Inc.
On November 11, 1999, The Presley Companies issued a Press Release, a
copy of which is attached hereto as Exhibit 99.2 announcing the consummation of
the merger effective as of 12:01 a.m. on November 11, 1999 and the release of
earnings for the quarter ended September 30, 1999 of $10,720,000 or $1.03 per
share compared to $3,299,000 or $0.32 per share for the quarter ended September
30, 1998.
On November 11, 1999, The Presley Companies issued a Press Release, a
copy of which is attached hereto as Exhibit 99.3 announcing the consummation of
the merger and the conversion of the shares of Series A Common Stock and Series
B Common Stock on a 1 for 5 exchange ratio into the new shares of Common Stock
of the surviving corporation.
Effective as of the effective time of the Merger on November 11, 1999,
New Presley Common Stock is deemed registered pursuant to Section 12(b) of the
1934 Act.
- 2 -
<PAGE> 3
Item 6. Not Applicable.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
Pro forma financial information required by Article 11 of Regulation S-X
and the financial statements of William Lyon Homes will be filed by amendment
not later than 60 days after the date of the initial report.
Exhibit 10.2 -- Purchase Agreement and Escrow Instructions, dated as of
October 7, 1999, by and among The Presley Companies,
Presley Homes, William Lyon Homes, William Lyon and
William H. Lyon (previously filed as Exhibit 10.2 to
the Registration Statement on Form S-4 filed on October
7, 1999 and incorporated herein by this reference).
Exhibit 99.1 -- Press Release dated November 5, 1999.
Exhibit 99.2 -- Press Release dated November 11, 1999.
Exhibit 99.3 -- Press Release dated November 11, 1999.
Item 8. Not Applicable.
SIGNATURE
Pursuant to the requirements of Section 13 and 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Dated: November 15, 1999
THE PRESLEY COMPANIES,
a Delaware corporation
By: /s/ David M. Siegel
------------------------------
Name: David M. Siegel
Title: Senior Vice President,
Chief Financial Officer
and Treasurer
- 3 -
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description
- ------- -----------
<C> <S>
10.2 Purchase Agreement and Escrow Instructions, dated as of
October 7, 1999, by and among The Presley Companies,
Presley Homes, William Lyon Homes, William Lyon and
William H. Lyon (previously filed as Exhibit 10.2 to
the Registration Statement on Form S-4 filed on October
7, 1999 and incorporated herein by this reference).
99.1 Press Release Dated November 5, 1999.
99.2 Press Release Dated November 11, 1999.
99.3 Press Release Dated November 11, 1999.
</TABLE>
- 4 -
<PAGE> 1
EXHIBIT 99.1
THE PRESLEY COMPANIES CLOSES PURCHASE OF SUBSTANTIALLY
ALL OF THE ASSETS OF WILLIAM LYON HOMES, INC.
A MAJORITY OF THE OUTSTANDING SHARES OF COMMON STOCK
OF THE PRESLEY COMPANIES VOTES IN FAVOR OF THE MERGER
NEWPORT BEACH, CA -- November 5, 1999 -- The Presley Companies ("Presley")
(NYSE: PDC) announced today that it has closed the asset purchase pursuant to
the Purchase Agreement, dated as of October 7, 1999, with William Lyon Homes,
Inc. ("William Lyon Homes"), William Lyon and his son, William H. Lyon
(collectively, the "Lyons"). Pursuant to the Purchase Agreement, Presley through
its subsidiaries and limited liability companies purchased substantially all of
the assets of William Lyon Homes for a cash purchase price of approximately $43
million and the assumption of substantially all of the liabilities of William
Lyon Homes.
At a Special Meeting of stockholders held today, Presley's stockholders
voted to approve the merger of Presley with and into a wholly-owned subsidiary.
In the merger, the subsidiary will be the surviving corporation and will be
renamed "The Presley Companies". Subject to the satisfaction of certain
conditions, the merger is expected to be effective on November 11, 1999. At the
effective time of the merger, each outstanding share of Series A Common Stock
and Series B Common Stock of Presley will be converted into 0.2 share of the
surviving corporation. Shares of the surviving corporation will be listed on the
New York Stock Exchange under the symbol "PDC".
Shares issued in the merger will be subject to certain transfer
restrictions. These restrictions are similar to those adopted by several other
public companies and are intended to help preserve Presley's substantial net
operating loss carryforwards for use in offsetting future taxable income. In
general, these restrictions will prohibit, without the prior approval of the
board of directors, the direct or indirect disposition or acquisition of any
stock of the surviving corporation by or to any holder who owns or would so own
upon the acquisition (either directly or through the tax attribution rules) 5%
or more of the surviving corporation's stock.
This press release (as well as oral statements or other written
statements made or to be made by Presley) may be deemed to contain certain
forward-looking statements with respect to the financial condition of Presley,
which involve risks and uncertainties including but not limited to the matters
disclosed in Presley's periodic and other reports filed with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended.
<PAGE> 2
William Lyon Homes is a California-based homebuilder and real estate
developer with 15 sales locations in Northern and Southern California. William
Lyon is the current Chairman of the Board of Presley.
The Presley Companies is one of the oldest and largest homebuilders in
the Southwest with development communities in California, Arizona, New Mexico
and Nevada. Founded in 1956, The Presley Companies has built and sold more than
48,000 homes and currently has 38 sales locations. Presley's corporate
headquarters are located in Newport Beach, California.
- 2 -
<PAGE> 1
EXHIBIT 99.2
Contact: Investor Relations Media Relations
W. Douglass Harris Steven D. Stern
The Presley Companies Pondel/Wilkinson Group
(949) 640-6400 (310) 207-9300
THE PRESLEY COMPANIES REPORTS COMPLETION OF MERGER WITH
AND INTO WHOLLY-OWNED SUBSIDIARY
THE PRESLEY COMPANIES REPORTS THIRD QUARTER NET INCOME
OF $10,720,000, OR $1.03 PER SHARE
NEWPORT BEACH, CA---November 11, 1999---The Presley Companies ("Presley" or the
"Company") (NYSE: PDC) today announced that effective at 12:01 a.m. (New York
Time) on Thursday, November 11, 1999, the merger of its former parent, The
Presley Companies ("Old Presley") with and into Presley Merger Sub, Inc. was
completed. In the merger, Presley Merger Sub, Inc. was the surviving corporation
and was renamed "The Presley Companies" at the effective time. Also, at the
effective time, each share of Old Presley's Series A Common Stock and Series B
Common Stock was converted into the right to receive 0.2 share of the Common
Stock, par value $.01 per share, of the surviving corporation, The Presley
Companies (formerly named "Presley Merger Sub, Inc."). Beginning on November 11,
1999, the Common Stock of the surviving corporation commenced trading on the New
York Stock Exchange under the symbol "PDC".
Shares issued in the merger are subject to certain transfer restrictions. These
restrictions are similar to those adopted by several other public companies and
are intended to help preserve Presley's substantial net operating loss
carryforwards for use in offsetting future taxable income. In general, these
restrictions will prohibit, without the prior approval of the Board of
Directors, the direct or indirect disposition or acquisition of any stock of the
surviving corporation by or to any holder who owns or would so own upon the
acquisition (either directly or through the tax attribution rules) 5% or more of
the surviving corporation's stock. The transfer restrictions are contained in
Article VIII of the Certificate of Incorporation and all stock certificates
issued by Presley will contain a legend that summarizes the transfer
restrictions.
The merger was completed after the November 5, 1999 acquisition of substantially
all of the assets and the assumption of substantially all of the liabilities of
William Lyon Homes, Inc. The merger will not otherwise result in any change in
the consolidated financial condition, business or assets of the Company.
<PAGE> 2
Presley will shortly be mailing to all of its stockholders instructions
regarding the surrender of their stock certificates representing shares of Old
Presley by means of a letter of transmittal. Until those stock certificates are
surrendered in accordance with the prescribed procedure, Presley will not issue
replacement certificates representing the shares of Presley into which a
stockholder's shares of Old Presley have been converted in the merger. Further,
no transfer will be effected on the transfer books of Presley unless and until
the stock certificates of Old Presley that previously represented the shares
presented for transfer have been surrendered in accordance with the prescribed
procedure. In addition, although Presley has no immediate plans for any
dividends or distributions on its stock, if it declares any dividends or
distributions in the future, a stockholder will not receive any amount with
respect to such stockholder's shares prior to the surrender, in accordance with
the prescribed procedure, of the applicable parent corporation stock
certificates. Further, no interest will accrue or be payable with respect to any
such dividends or distributions retained in respect of those shares.
The common stock and earnings per share information included herein reflects
adjustments for all periods presented for the retroactive effect of the merger
as described above and the conversion of each share of previously outstanding
Series A Common Stock and Series B Common Stock into 0.2 shares of Common Stock
of the surviving corporation.
Presley today reported net income for the third quarter ended September 30, 1999
of $10,720,000, or $1.03 per share, on sales of $88,363,000, as compared with
net income of $3,299,000, or $0.32 per share, on sales of $89,509,000 for the
comparable period a year ago. Sales of homes were $87,630,000 for the quarter
ended September 30, 1999, down 2 percent from $89,319,000 for the comparable
period a year ago. Sales of lots and land were $733,000 for the quarter ended
September 30, 1999, as compared with $190,000 for the quarter ended September
30, 1998.
For the nine months ended September 30, 1999, the Company reported net income of
$25,593,000, or $2.45 per share, on sales of $266,375,000, as compared with a
net income of $1,214,000, or $0.12 per share, on sales of $236,517,000 for the
comparable period a year ago. Sales of homes were $261,686,000 for the nine
months ended September 30, 1999, up 16 percent from $225,592,000 for the
comparable period a year ago. Sales of lots and land were $4,689,000 for the
nine months ended September 30, 1999, as compared with $10,925,000 for the nine
months ended September 30, 1998. The results for the nine months ended September
30, 1999 included an extraordinary gain from the retirement of debt of
$1,789,000, or $0.17 per share, after applicable income taxes, as compared with
$522,000, or $0.05 per share, after applicable income taxes, for the comparable
period a year ago.
2
<PAGE> 3
Homes sold, closed and in backlog for the Company and its unconsolidated joint
ventures as of and for the periods presented are as follows:
<TABLE>
<CAPTION>
As of and for As of and for
the Three Months the Nine Months
Ended September 30, Ended September 30,
--------------------------------------------
1999 1998 1999 1998
------ ------ -------- --------
<S> <C> <C> <C> <C>
Number of homes sold
Company 337 507 1,275 1,587
Unconsolidated joint ventures 110 42 431 123
------ ------ -------- --------
Combined total 447 549 1,706 1,710
====== ====== ======== ========
Number of homes closed
Company 441 474 1,280 1,206
Unconsolidated joint ventures 144 20 356 22
------ ------ -------- --------
Combined total 585 494 1,636 1,228
====== ====== ======== ========
Backlog of homes sold but not closed at
end of period
Company 484 777 484 777
Unconsolidated joint ventures 203 108 203 108
------ ------ -------- --------
Combined total 687 885 687 885
====== ====== ======== ========
Dollar amount of backlog of homes sold but not
closed at end of period (in millions):
Company $ 97.7 $168.2 $ 97.7 $ 168.2
Unconsolidated joint ventures 81.8 54.6 81.8 54.6
------ ------ -------- --------
Combined total $179.5 $222.8 $ 179.5 $ 222.8
====== ====== ======== ========
</TABLE>
Net new home orders for the quarter ended September 30, 1999 decreased 19
percent to 447 units from 549 units a year ago. For the third quarter of 1999,
net new home orders decreased 26 percent to 447 units from 605 units in the
second quarter of 1999. The number of homes closed in the third quarter of 1999
was up 18 percent to 585 from 494 in the third quarter of 1998. The backlog of
homes sold as of September 30, 1999 was 687, down 22 percent from 885 units a
year earlier, and down 17 percent from 825 units at June 30, 1999.
The dollar amount of backlog of homes sold but not closed as of September 30,
1999 was $179,500,000, as compared with $222,800,000 as of September 30, 1998
and $215,700,000 as of June 30, 1999.
The decrease in net new home orders for the three months ended September 30,
1999 as compared to the three months ended September 30, 1998 is primarily the
result of a decrease in the number of sales locations to 38 at September 30,
1999 from 47 at September 30, 1998. The increase in number of homes closed for
the three and nine month periods of 1999 as compared with 1998 is primarily the
result of improved market conditions in substantially all of the Company's
markets.
3
<PAGE> 4
As previously announced, on November 5, 1999, the Company completed the
acquisition of substantially all of the assets of William Lyon Homes, Inc. If
the acquisition had been completed as of September 30, 1999, pro forma backlog
information as of September 30, 1999 would have been as follows:
<TABLE>
<S> <C>
Backlog of homes sold but not closed at
September 30, 1999
Presley combined total 687
William Lyon Homes, Inc. 354
--------
Combined pro forma total 1,041
========
Dollar amount of backlog of homes sold but
not closed at September 30, 1999 (in millions):
Presley combined total $ 179.5
William Lyon Homes, Inc. 91.7
--------
$ 271.2
========
</TABLE>
Wade Cable, President and Chief Executive Officer, stated "As we look to the
exciting future combining the Presley and William Lyon Homes operations, I am
gratified to report the remarkable improvement in Presley's operations in the
last eighteen months. Presley has now reported profits for six consecutive
quarters; debt levels have been reduced from approximately $225 million at
September 30, 1998 to approximately $155 million at September 30, 1999 and
stockholders' equity has improved from a deficit of approximately $4 million at
September 30, 1998 to a positive balance of approximately $36 million at
September 30, 1999."
The Company also reported that for purposes of the Indenture governing its
Senior Notes, EBITDA (earnings before interest, taxes, depreciation and
amortization) was $33,922,000 for the third quarter of 1999 as compared to
$32,963,000 for the third quarter of 1998. EBITDA coverage of interest incurred
for the three months ended September 30, 1999 was 5.75, as compared to 4.31 for
the three months ended September 30, 1998. EBITDA after development expenditures
amounted to $37,563,000 for the third quarter of 1999 as compared to $6,557,000
for the third quarter of 1998.
The Presley Companies is one of California's oldest and largest homebuilders in
the Southwest with development communities in California, Arizona, New Mexico
and Nevada. Founded in 1956, The Presley Companies has built and sold more than
48,000 homes and as of September 30, 1999 has 38 sales locations. William Lyon
Homes, Inc. has 15 sales locations as of September 30, 1999. Presley's corporate
headquarters are located in Newport Beach, California.
Certain statements contained in this release that are not historical information
contain forward-looking statements. The forward-looking statements involve risks
and uncertainties and actual results may differ materially from those projected
or implied. Further, certain forward-looking statements are based on assumptions
of future events which may not prove to be accurate. Factors that may impact
such forward-looking statements include, among others, changes in general
economic conditions and in the markets in which the Company competes, changes in
interest rates and competition, as well as the other factors discussed in the
Company's reports filed with the Securities and Exchange Commission.
4
<PAGE> 5
'
THE PRESLEY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT PER COMMON SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- ------------------------
1999 1998 1999 1998
-------- --------- --------- ---------
<S> <C> <C> <C> <C>
Sales
Homes $ 87,630 $ 89,319 $ 261,686 $ 225,592
Lots, land and other 733 190 4,689 10,925
-------- --------- --------- ---------
88,363 89,509 266,375 236,517
-------- --------- --------- ---------
Operating costs
Cost of sales - homes (72,071) (75,197) (216,188) (194,194)
Cost of sales - lots, land and other (1,072) (1,227) (4,813) (11,378)
Sales and marketing (4,198) (5,385) (12,658) (15,180)
General and administrative (4,944) (3,188) (12,817) (10,144)
-------- --------- --------- ---------
(82,285) (84,997) (246,476) (230,896)
-------- --------- --------- ---------
Equity in income of unconsolidated
joint ventures 7,414 501 12,278 346
-------- --------- --------- ---------
Operating income 13,492 5,013 32,177 5,967
Interest expense, net of amounts capitalized (883) (2,180) (4,554) (7,073)
Financial advisory expenses (917) -- (2,197) --
Other income (expense), net 825 669 2,366 1,638
-------- --------- --------- ---------
Income before income taxes and
extraordinary item 12,517 3,502 27,792 532
(Provision) credit for income taxes (1,797) (203) (3,988) 160
-------- --------- --------- ---------
Income before extraordinary item 10,720 3,299 23,804 692
Extraordinary item - gain from retirement of
debt, net of applicable income taxes -- -- 1,789 522
-------- --------- --------- ---------
Net income $ 10,720 $ 3,299 $ 25,593 $ 1,214
======== ========= ========= =========
Basic and diluted earnings per common
share (1)
Before extraordinary item $ 1.03 $ 0.32 $ 2.28 $ 0.07
Extraordinary item -- -- 0.17 0.05
-------- --------- --------- ---------
After extraordinary item $ 1.03 $ 0.32 $ 2.45 $ 0.12
======== ========= ========= =========
</TABLE>
(1) Reflects adjustment for all periods presented for the retroactive effect
of the merger with a wholly-owned subsidiary and the conversion of each
share of previously outstanding Series A and Series B Common Stock into
0.2 common shares of the surviving company.
5
<PAGE> 6
THE PRESLEY COMPANIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT NUMBER OF SHARES AND PAR VALUE PER SHARE)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- ------------
(unaudited)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 7,223 $ 23,955
Receivables 17,087 8,613
Real estate inventories 164,777 174,502
Investments in and advances to unconsolidated
joint ventures 36,632 30,462
Property and equipment, less accumulated
depreciation of $4,023 and $3,156 at September 30,
1999 and December 31, 1998, respectively 2,259 2,912
Deferred loan costs 2,204 3,381
Other assets 5,325 2,579
--------- ---------
$ 235,507 $ 246,404
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 20,692 $ 17,364
Accrued expenses 23,839 27,823
Notes payable 35,271 55,393
12-1/2% Senior Notes due 2001 120,000 140,000
--------- ---------
199,802 240,580
--------- ---------
Stockholders' equity (1)
Common stock, par value $.01 per share;
30,000,000 shares authorized; 10,439,135
shares issued and outstanding at
September 30, 1999 and December 31, 1998,
respectively 104 104
Additional paid-in capital 120,955 116,667
Accumulated deficit from January 1, 1994 (85,354) (110,947)
--------- ---------
35,705 5,824
--------- ---------
$ 235,507 $ 246,404
========= =========
</TABLE>
(1) Reflects adjustment for all periods presented for the retroactive effect
of the merger with a wholly-owned subsidiary and the conversion of each
share of previously outstanding Series A and Series B Common Stock into
0.2 common shares of the surviving company.
6
<PAGE> 7
THE PRESLEY COMPANIES
SUPPLEMENTAL FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
The following table sets forth certain selected unaudited financial data
regarding the Company's cash flow for the purposes of the Indenture governing
the Company's Senior Notes:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- ------------------------
1999 1998 1999 1998
-------- -------- --------- --------
<S> <C> <C> <C> <C>
EBIT $ 11,297 $ 11,472 $ 40,468 $ 26,121
Amortization of Non-Cash Costs to Cost of Sales,
excluding interest amortized to cost of sales 22,294 21,202 67,826 65,698
Depreciation and amortization 331 289 879 811
-------- -------- --------- --------
EBITDA $ 33,922 $ 32,963 $ 109,172 $ 92,630
======== ======== ========= ========
Development expenditures:
Lot and amenity development $ (8,974) $(14,383) $ (28,293) $(35,186)
Land acquisitions 897 (8,837) (38,219) (23,181)
Net change in housing inventory 5,936 (3,161) 3,277 (30,300)
Investment in unconsolidated joint ventures 5,783 (25) 6,196 15,571
-------- -------- --------- --------
Total development expenditures 3,642 (26,406) (57,039) (73,096)
-------- -------- --------- --------
EBITDA after development expenditures $ 37,563 $ 6,557 $ 52,133 $ 19,534
======== ======== ========= ========
Interest expensed and amortized to cost of sales:
Interest incurred $ 5,899 $ 7,652 $ 17,645 $ 24,308
Less capitalized interest (5,016) (5,472) (13,091) (17,235)
-------- -------- --------- --------
Interest expensed 883 2,180 4,554 7,073
Amortization of capitalized interest
included in cost of sales 5,384 6,392 18,536 18,196
-------- -------- --------- --------
Total interest expensed and amortized to
cost of sales $ 6,267 $ 8,572 $ 23,090 $ 25,269
======== ======== ========= ========
Interest incurred $ 5,899 $ 7,652 $ 17,645 $ 24,308
======== ======== ========= ========
EBITDA/Interest incurred 5.75x 4.31x 6.19x 3.81x
======== ======== ========= ========
</TABLE>
7
<PAGE> 1
EXHIBIT 99.3
Contact: Investor Relations Media Relations
W. Douglass Harris Steven D. Stern
The Presley Companies Pondel/Wilkinson Group
(949) 640-6400 (310) 207-9300
THE PRESLEY COMPANIES COMPLETES MERGER
RESULTING IN 1 FOR 5 EXCHANGE OF SHARES
NEWPORT BEACH, CA---November 11, 1999---The Presley Companies (formerly known as
Presley Merger Sub, Inc.) (NYSE: PDC) announced today that it has completed a
merger with its parent corporation. In the merger, Presley Merger Sub, Inc. was
the surviving corporation and was renamed "The Presley Companies" which had been
the name of its parent prior to the merger. As a result, the subsidiary is the
successor entity and assumed all of the assets, liabilities and business of its
parent.
The merger had a 1 for 5 exchange ratio and as a result of the merger, each 5
shares of Series A Common Stock and Series B Common Stock of the parent was
converted into 1 share of the surviving corporation. As a result of the exchange
ratio in the merger, the 52,195,678 shares of Series A Common Stock and the
Series B Common Stock of The Presley Companies that were outstanding on the
close of business on November 10, 1999 were converted into 10,439,135 shares of
Common Stock of the surviving corporation at the effective time, 12:01 a.m. on
November 11, 1999.
Shares of the new common stock are listed on the New York Stock Exchange under
the symbol "PDC".
This press release (as well as oral statements or other written statements made
or to be made by Presley) may be deemed to contain certain forward-looking
statements with respect to the financial condition of Presley, which involve
risks and uncertainties including but not limited to the matters disclosed in
Presley=s periodic and other reports filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended.
The Presley Companies is one of the oldest and largest homebuilders in the
Southwest with development communities in California, Arizona, New Mexico and
Nevada. Founded in 1956, The Presley Companies has built and sold more than
48,000 homes and currently has 38 sales locations. Presley's corporate
headquarters are located in Newport Beach, California.
