<PAGE> 1
PROSPECTUS SUPPLEMENT
- ------------------------------------------------
(To Prospectus dated June 5, 1995)
$100,000,000
CENTEX CORPORATION
7 3/8% SUBORDINATED DEBENTURES DUE JUNE 1, 2005
------------------------
Interest on the 7 3/8% Subordinated Debentures due June 1, 2005 (the
"Debentures") is payable on June 1 and December 1 of each year, commencing
December 1, 1995. The Debentures will not be redeemable prior to maturity. The
Debentures are subordinated to certain present and future indebtedness of Centex
Corporation (the "Company"). The Debentures will be issued in the form of one or
more Global Securities (the "Global Securities") registered in the name of The
Depository Trust Company (the "Depository") or its nominee. Interests in the
Global Securities will be shown on, and transfers will be effected only through,
records maintained by the Depository and its participants. Except as described
herein, Debentures in definitive form will not be issued. See "Description of
Debentures" in this Prospectus Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE ACCOMPANYING PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
Initial Public Underwriting Proceeds to
Offering Price(1) Discount(2) Company(3)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Debenture..................... 99.511% .600% 98.911%
- -------------------------------------------------------------------------------------------------
Total............................. $99,511,000 $600,000 $98,911,000
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from June 9, 1995.
(2) The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting" in this Prospectus Supplement.
(3) Before deducting estimated expenses of $135,000 payable by the Company.
------------------------
The Debentures are offered by the Underwriter, as specified herein, subject
to receipt and acceptance by the Underwriter and subject to the Underwriter's
right to reject orders in whole or in part. It is expected that delivery of the
Global Securities will be made through the facilities of the Depository on or
about June 9, 1995.
------------------------
NATIONSBANC CAPITAL MARKETS, INC.
------------------------
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS JUNE 5, 1995.
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS IN THE DEBENTURES, THE COMPANY'S 8.75% SUBORDINATED DEBENTURES OR
THE COMPANY'S 9.05% SENIOR NOTES WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF
THE DEBENTURES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
S-2
<PAGE> 3
USE OF PROCEEDS
The net proceeds from the sale of the Debentures are estimated to be
approximately $98,776,000 (after deduction of underwriting discounts and
expenses payable by the Company). Such proceeds initially will be used to repay
short-term notes payable to banks and commercial paper borrowings with a
weighted average interest rate of approximately 6.25%.
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
March 31, 1995 and as adjusted (unaudited) to give effect to the issuance of the
Debentures offered hereby and the application of the proceeds as indicated under
"Use of Proceeds".
<TABLE>
<CAPTION>
MARCH 31, 1995
------------------------------------------------------------------------------
CENTEX CORPORATION AND CENTEX FINANCIAL
SUBSIDIARIES CORPORATION SERVICES
---------------------- ---------------------- --------------------
AS AS AS
ACTUAL ADJUSTED ACTUAL ADJUSTED ACTUAL ADJUSTED
--------- --------- --------- --------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Short-term debt(1)(6)(7)................ $ 576,260 $ 477,484 $ 204,851 $ 106,075 $ 371,409 $ 371,409
Long-term debt(2)(6)
Debentures, offered hereby............ -- 100,000 -- 100,000 -- --
Senior notes(3)....................... 100,000 100,000 100,000 100,000 -- --
Subordinated debentures(4)............ 119,316 119,316 119,316 119,316 -- --
Other indebtedness(8)................. 3,214 3,214 3,214 3,214 -- --
---------- ---------- ---------- ---------- --------- ---------
Total debt...................... 798,790 800,014 427,381 428,605 371,409 371,409
---------- ---------- ---------- ---------- --------- ---------
Stockholders' Equity
Preferred stock, undesignated par
value; authorized 5,000,000 shares;
none issued......................... -- -- -- -- -- --
Common stock, $.25 par value;
authorized 50,000,000 shares;
outstanding 28,070,978 shares(5).... 7,018 7,018 7,018 7,018 12 12
Capital in excess of par value........ -- -- -- -- 51,908 51,908
Retained earnings..................... 661,209 661,209 661,209 661,209 42,683 42,683
---------- ---------- ---------- ---------- --------- ---------
Total stockholders' equity............ 668,227 668,227 668,227 668,227 94,603 94,603
---------- ---------- ---------- ---------- --------- ---------
Total debt and stockholders'
equity........................ $1,467,017 $1,468,241 $1,095,608 $1,096,832 $ 466,012 $ 466,012
========== ========== ========== ========== ========= =========
</TABLE>
- ---------------
(1) Short-term debt of $576 million at March 31, 1995 included $125 million in
commercial paper and $275 million payable to banks. The Company borrows on
a short-term basis from banks under uncommitted lines which bear interest
at prevailing money market rates. The weighted average interest rate on
such short-term debt at March 31, 1995 was 6.6%.
(2) During fiscal 1994, Centex maintained two separate credit agreements
totaling $465 million with a group of banks which were available for
general corporate purposes. These facilities were replaced in July 1994
with a $425 million revolving credit agreement expiring in July 1999. Under
the terms of this agreement, $170 million may be borrowed directly by CTX
Mortgage Company ("CTX"), Centex's mortgage banking subsidiary. There were
no borrowings outstanding to the Company or CTX under this or the previous
facilities during the fiscal year ended March 31, 1995.
(3) In May 1991, the Company issued $100,000,000 principal amount of its 9.05%
senior notes due May 1, 1996. Such notes, which were sold at par, are not
redeemable prior to maturity. Such notes constitute Senior Indebtedness (as
defined in the Indenture described in the accompanying Prospectus) and,
therefore, rank senior in right of payment to the Debentures offered
hereby. See "Description of Subordinated Debt Securities" in the
accompanying Prospectus.
(4) In March 1987, the Company issued $100,000,000 principal amount of its 8.75%
subordinated debentures maturing March 1, 2007. Such debentures are not
redeemable prior to maturity. The Company sold these debentures at a
discount to par to yield 8.84% over their 20-year life. The discount is
being amortized as additional interest expense based on the yield method.
The unamortized discount at March 31, 1995 of
S-3
<PAGE> 4
$684,000 was offset against the debenture balance. In June 1987, the
Company issued $20,000,000 principal amount of its 8.80% subordinated
debentures maturing June 30, 2007. Such debentures are not redeemable by
the Company prior to June 30, 1997. Such debentures are redeemable at the
request of a debentureholder at any time prior to maturity upon the
occurrence of certain events related to the completion and continued
operation by the Company of a gypsum wallboard plant. Such debentures were
sold at a price of 100% of the principal amount thereof. The $120,000,000
principal amount of subordinated debentures described in this footnote (4)
rank equally in right of payment with the Debentures offered hereby. See
"Description of Subordinated Debt Securities" in the accompanying
Prospectus.
(5) At March 31, 1995, the Company had 4,369,286 shares of its common stock
reserved for issuance under its stock option plans, 3,406,073 of which were
subject to outstanding options.
(6) At March 31, 1995, the aggregate amount of the Company's outstanding
indebtedness that would rank senior to the Debentures offered hereby was
approximately $534.8 million, including approximately $230.8 million of
indebtedness to the Company's subsidiaries. See "Description of
Subordinated Debt Securities" in the accompanying Prospectus.
(7) In an effort to be more meaningful, the above table presents the
capitalization of the Company on a fully-consolidated basis (the "Centex
Corporation and Subsidiaries" column), including the consolidated debt of
CTX, the capitalization related to the Company's business operations other
than financial services operations (the "Centex Corporation" column) and
the capitalization related to the Company's financial services operations
(the "Financial Services" column). The Company also utilizes this
presentation in connection with the presentation of its consolidated
balance sheets.
(8) Includes $2,100,000 of convertible subordinated debt due in the year 2000.
RATINGS
At the time of their original issuance, the Debentures will be rated BBB-
by Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc., and Baa3 by
Moody's Investor Services, Inc. A security rating is not a recommendation to
buy, sell or hold securities and may be subject to revision or withdrawal at any
time by the assigning rating organization.
DESCRIPTION OF DEBENTURES
The following description of the particular terms of the Debentures offered
hereby supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of Debentures set forth in the
accompanying Prospectus.
GENERAL
The Debentures will be issued under an Indenture dated as of March 12, 1987
(the "Indenture"), as supplemented by a Supplemental Indenture with respect
thereto to be dated as of June 9, 1995 (the "Supplemental Indenture"), between
the Company and Texas Commerce Bank National Association, as trustee (the
"Trustee").
The Debentures will be unsecured obligations of the Company, will mature on
June 1, 2005, and will be limited to an aggregate principal amount of
$100,000,000, although the Indenture provides that additional subordinated debt
securities may be issued thereunder up to the aggregate principal amount, which
is not limited by the Indenture, authorized from time to time by the Company's
Board of Directors.
Interest on the Debentures will be payable semiannually on June 1 and
December 1, commencing December 1, 1995, to holders of record on the preceding
May 15 and November 15, respectively, at the per annum rate set forth on the
cover page of this Prospectus Supplement, with respect to interest accrued from
the preceding interest payment date (or from the date of original issuance of
the Debentures in the case of the first interest payment) to the current
interest payment date.
S-4
<PAGE> 5
Neither the Indenture nor the Supplemental Indenture contains any
provisions providing for redemption at the option of the holders of the
Debentures, any obligation of the Company to redeem, repay or purchase pursuant
to any sinking fund or analogous provision any of the Debentures or any event of
default with respect to such Debentures other than those discussed in the
accompanying Prospectus. See "Description of Subordinated Debt Securities" in
the accompanying Prospectus.
SUBORDINATION
Except as provided in the accompanying Prospectus, the payment of the
principal of and premium, if any, and interest on, the Debentures will be
subordinated and junior in right of payment, to the extent and in the manner set
forth in the Indenture, to the prior payment in full of all Senior Indebtedness
of the Company. The terms "Company" and "Senior Indebtedness" as used in this
subsection have the respective meanings set forth in the accompanying Prospectus
under the caption "Description of Subordinated Debt Securities." The Indenture
does not contain any limitation on the amount of Senior Indebtedness that may be
incurred by the Company after the date of this Prospectus Supplement. The
aggregate amount of the Company's Senior Indebtedness at March 31, 1995 was
approximately $534.8 million, $230.8 million of which represented indebtedness
owed by the Company to its subsidiaries.
The Indenture provides that the indebtedness evidenced by the Debentures
ranks on a parity with the Company's $2,100,000 convertible subordinated note
due in the year 2000, is entitled to like rights of subrogation and is otherwise
not superior in right of payment to such note. The Debentures will rank equally
with each other series of Debentures issued under the Indenture, including the
Company's $100,000,000 8.75% subordinated debentures due March 1, 2007 and its
$20,000,000 8.80% subordinated debentures due June 30, 2007. See footnotes (4)
and (8) under "Capitalization" above.
Except as provided in the accompanying Prospectus, the Indenture prohibits
any payment by the Company of principal of and premium, if any, or interest on,
the Debentures during the continuance of any default in respect of certain
Senior Indebtedness of the Company or any default under any agreement pursuant
to which such Senior Indebtedness of the Company was issued beyond the period of
grace, unless and until such default on such Senior Indebtedness of the Company
shall have been cured or waived.
Except as provided in the accompanying Prospectus, upon any distribution of
assets of the Company in connection with any dissolution, winding up,
liquidation, reorganization, bankruptcy or other similar proceeding relative to
the Company, its creditors or its property, the holders of all Senior
Indebtedness of the Company will first be entitled to receive payment in full of
the principal thereof and premium, if any, and interest due thereon before the
holders of the Debentures are entitled to receive any payment of the principal
of and premium, if any, or interest on the Debentures. By reason of such
subordination, in the event of insolvency, creditors of the Company who are not
holders of Senior Indebtedness of the Company or of the Debentures may recover
less, ratably, than holders of Senior Indebtedness of the Company but may
recover more, ratably, than holders of the Debentures.
GLOBAL SECURITIES
The Debentures will be issued in whole or in part in the form of one or
more Global Securities deposited with, or on behalf of, the Depository and
registered in the name of a nominee of the Depository. Except under the limited
circumstances described in the Prospectus under "Description of Subordinated
Debt Securities -- Global Securities," owners of beneficial interests in Global
Securities will not be entitled to physical delivery of Debentures in
certificated form. Global Securities may not be transferred except as a whole by
the Depository to a nominee of the Depository or by a nominee of the Depository
to the Depository or another nominee of the Depository or by the Depository or
any nominee to a successor of the Depository or a nominee of such successor. A
further description of the Depository's procedures with respect to Global
Securities representing the Debentures is set forth in the Prospectus under
"Description of Subordinated Debt Securities -- Global Securities". The
Depository has confirmed to the Company, the Underwriter and the Trustee that it
intends to follow such procedures.
S-5
<PAGE> 6
The Depository has advised the Company and the Underwriter as follows: The
Depository is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended. The Depository was created to hold
securities of its participants and to facilitate the clearance and settlement of
securities transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depository's participants include securities brokers and dealers (including the
Underwriter), banks, trust companies, clearing corporations and certain other
organizations, some of which (and/or their representatives) own the Depository.
Access to the Depository's book-entry system is also available to others, such
as banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly.
Persons who are not participants may own beneficial interests in Global
Securities held by the Depository only through participants.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, the Company has agreed to sell to NationsBanc Capital Markets, Inc.
(the "Underwriter"), and the Underwriter has agreed to purchase from the
Company, the entire $100,000,000 principal amount of the Debentures.
Under the terms and conditions of the Underwriting Agreement, the
obligations of the Underwriter are subject to certain conditions precedent, and
the Underwriter is committed to take and pay for all of the Debentures, if any
are taken.
The Underwriter proposes to offer the Debentures in part directly to the
public at the initial public offering price set forth on the cover page of this
Prospectus Supplement and in part to certain securities dealers at such price
less a concession not to exceed .400% of the principal amount of the Debentures.
The Underwriter may allow, and such dealers may reallow, a concession not to
exceed .250% of the principal amount of the Debentures to certain brokers and
dealers. After the Debentures are released for sale to the public, the offering
price and other selling terms may from time to time be varied by the
Underwriter.
The Debentures are a new issue of securities with no established trading
market. The Company has been advised by the Underwriter that it presently
intends to make a market in the Debentures, but the Underwriter is not obligated
to do so and may discontinue any market making activities at any time without
notice. No assurance can be given as to the existence or the liquidity of any
trading market for the Debentures.
The Company has agreed not to issue any long-term debt securities
substantially similar to the Debentures without the prior written consent of the
Underwriter from the date hereof through the date on which the Debentures are
issued.
The Company has agreed to indemnify the Underwriter with respect to certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
The Company and its affiliates maintain banking relationships in the
ordinary course of business with affiliates of the Underwriter, including
NationsBank of Texas, N.A.
S-6
<PAGE> 7
PROSPECTUS
CENTEX CORPORATION
SUBORDINATED DEBT SECURITIES
---------------------
The Company may from time to time issue and offer up to $100,000,000 (or
its equivalent in other currencies) aggregate principal amount of Subordinated
Debt Securities consisting of bonds, debentures, notes and/or other unsecured
evidences of indebtedness in one or more series. The Subordinated Debt
Securities may be offered as separate series in amounts, at prices and on terms
to be determined at the time of sale. An accompanying Prospectus Supplement will
set forth, with regard to the Subordinated Debt Securities in respect of which
this Prospectus is being delivered, the terms of the Subordinated Debt
Securities, including, where applicable, the specific designation, aggregate
principal amount, denominations, maturity, rate (which may be fixed or variable)
and time of payment of any interest, any terms for redemption at the option of
the Company or the holder, any terms for sinking fund payments, any listing on a
securities exchange and the initial public offering price and any other terms in
connection with the offering and sale of such Subordinated Debt Securities.
The Company may sell Subordinated Debt Securities to or through
underwriters, and also may sell Subordinated Debt Securities directly to other
purchasers or through agents. An accompanying Prospectus Supplement will set
forth the names of any underwriters or agents involved in the sale of the
Subordinated Debt Securities in respect of which this Prospectus is being
delivered, the principal amounts, if any, to be purchased by underwriters and
the compensation, if any, of such underwriters or agents.
The Subordinated Debt Securities will rank junior in right of payment to
the Company's current and future Senior Indebtedness (as defined). The Indenture
pursuant to which the Subordinated Debt Securities will be issued does not
contain any limitation on the amount of Senior Indebtedness or other
indebtedness that may be incurred by the Company. The aggregate amount of the
Company's Senior Indebtedness at March 31, 1995 was approximately $534.8
million, $230.8 million of which represented indebtedness owed by the Company to
its subsidiaries. Because the Company conducts its business through
subsidiaries, the Company's rights and the rights of its creditors, including
holders of the Subordinated Debt Securities, to participate in the assets of any
subsidiary upon the latter's liquidation or recapitalization will be subject to
the prior claims of the subsidiary's creditors, except to the extent that the
Company may itself be a creditor with recognized claims against the subsidiary.
As of March 31, 1995, subsidiaries of the Company had approximately $373 million
principal amount of debt outstanding to third party creditors. Moreover, the
ability of the Company to pay principal of and interest on the Subordinated Debt
Securities is, to a large extent, dependent upon the payment to it of dividends,
interest or other amounts by subsidiaries of the Company. The Indenture under
which the Subordinated Debt Securities will be issued contains no limitation on
the ability of the Company to incur additional debt or on the ability of the
Company's subsidiaries to incur additional debt to the Company or to
unaffiliated third parties. See "Description of Subordinated Debt Securities" in
this Prospectus.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS OR THE ACCOMPANYING PROSPECTUS SUPPLEMENT.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
This Prospectus may not be used to consummate sales of Subordinated Debt
Securities unless accompanied by a Prospectus Supplement.
---------------------
The date of this Prospectus is June 5, 1995.
<PAGE> 8
AVAILABLE INFORMATION
Centex Corporation, a Nevada corporation (which, together with its
subsidiaries consolidated for financial reporting purposes, is herein and in the
Prospectus Supplement referred to as "Centex" or the "Company," unless otherwise
specified herein or the context requires otherwise), is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Reports, proxy statements and other information filed by the
Company may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's Regional Offices at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511, and at 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of such materials can be obtained by mail at prescribed rates from the
Public Reference Branch of the Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549. In addition, such material may also be inspected and copied at the
offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended, with
respect to the Subordinated Debt Securities offered hereby. This Prospectus and
the Prospectus Supplement, which form a part of the Registration Statement, do
not contain all the information set forth in the Registration Statement, certain
parts of which have been omitted in accordance with the rules and regulations of
the Commission. For further information, reference is hereby made to the
Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 1-6776)
pursuant to the Exchange Act are incorporated herein by reference:
1. The Joint Annual Report on Form 10-K of the Company and 3333
Holding Corporation and Centex Development Company, L.P. for the fiscal
year ended March 31, 1995; and
2. All other documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering of the
Subordinated Debt Securities.
Any statement contained herein or in a document or information incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus and the Prospectus Supplement to
the extent that a statement contained herein or in any subsequently filed
document which also is, or is deemed to be, incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus or the Prospectus Supplement.
The Company will provide without charge to each person to whom this
Prospectus or the Prospectus Supplement have been delivered, upon the request of
any such person, a copy of any and all of the documents which have been or may
be incorporated by reference in this Prospectus and the Prospectus Supplement,
other than exhibits to such information (unless such exhibits are specifically
incorporated by reference into such documents). Requests should be directed to
Raymond G. Smerge, Vice President, Chief Legal Officer and Secretary, Centex
Corporation, 3333 Lee Parkway, Dallas, Texas 75219, telephone (214) 559-6500.
2
<PAGE> 9
THE COMPANY
Centex Corporation, through its subsidiaries, currently operates in three
business segments: Home Building, Financial Services, and Contracting and
Construction Services. Home building operations primarily involve the
construction and sale of residential housing, including the purchase and
development of land. As an integral part of its home building function, the
Company also offers mortgage and other financial services to its home buyers and
others. Contracting and construction services activities involve the
construction of multi-purpose buildings and facilities for both private and
government interests, including hospitals, hotels, museums, libraries, airport
terminals, condominiums and educational facilities. In April 1994, the Company's
construction products subsidiary, Centex Construction Products, Inc. ("CXP"),
completed an initial public offering of 51% of its common stock; Centex
Corporation still retains 49% of CXP's common stock. CXP's operations include
the production, distribution and sale of cement, aggregates, readymix concrete
and gypsum wallboard. The Company also was engaged in the savings and loan
business until this operation was sold in December 1994. See "Business".
The address of the Company's principal executive office is 3333 Lee
Parkway, Dallas, Texas 75219, and its telephone number is (214) 559-6500.
USE OF PROCEEDS
Except as otherwise provided in the related Prospectus Supplement, the net
proceeds from the sale of the Subordinated Debt Securities will be added to the
general funds of the Company and will be available for funding investments in
and loans or advances to the Company's mortgage banking and other subsidiaries
to meet their short-term funding needs, to provide working capital, to finance
acquisitions and for use in connection with the retirement of debt. Such
proceeds initially will be used to repay short-term notes payable to banks and
commercial paper borrowings.
RATIO OF EARNINGS TO FIXED CHARGES(1)
<TABLE>
<CAPTION>
FOR THE FISCAL YEARS ENDED MARCH 31,
-----------------------------------------
1995 1994 1993 1992 1991
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Company (excluding mortgage banking and savings and
loan operations)(2)............................... 4.57X 2.80X 2.60X 1.93X 2.52X
Total enterprise(3)................................. 3.23X 2.77X 2.27X 1.59X 1.55X
</TABLE>
- ---------------
(1) For purposes of calculating this ratio, fixed charges consist of interest
costs (interest expense plus capitalized interest), one-third of estimated
rent expenses (as representative of the interest portion of rentals) and
amortization of debt expense, and earnings consist of net earnings before
income taxes, extraordinary items and fixed charges.
(2) See footnote (1) to "Summary of Selected Financial Data" and
"Business -- Home Building" and "Business -- Financial Services".
(3) The ratio of earnings to fixed charges on a total enterprise basis, pursuant
to the rules and regulations promulgated by the Commission, includes the
earnings and fixed charges of the Company's mortgage banking subsidiaries
and discontinued savings and loan operations, which are consolidated for
financial reporting purposes in accordance with generally accepted
accounting principles. See "Business -- Home Building" and
"Business -- Financial Services".
3
<PAGE> 10
SUMMARY OF SELECTED FINANCIAL DATA
The following is a summary of certain selected financial data related to
the Company for each of the five years in the period ended March 31, 1995, which
is derived from the consolidated financial statements of the Company audited by
Arthur Andersen LLP, independent public accountants. The March 31, 1995 and 1994
consolidated balance sheets and the related consolidated statements of earnings,
stockholders' equity and cash flows for each of the three years in the period
ended March 31, 1995 included as an exhibit to the Joint Annual Report on Form
10-K of the Company and 3333 Holding Corporation and Centex Development Company,
L.P. for such year are incorporated by reference herein. The summary is
qualified in its entirety by such financial statements and the notes thereto.
<TABLE>
<CAPTION>
FOR THE FISCAL YEARS ENDED MARCH 31,
-------------------------------------------------------------
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Revenues......................... $3,277,504 $3,039,709 $2,363,325 $2,028,646 $2,089,110
Net earnings..................... $ 92,248 $ 85,162 $ 61,038 $ 34,557 $ 43,605
Total assets..................... $2,049,698 $2,580,356 $2,272,093 $2,347,452 $2,037,486
Total long-term debt, including
debentures(1).................. $ 222,530 $ 222,832 $ 223,988 $ 232,294 $ 137,235
Total debt(1).................... $ 427,381 $ 429,470 $ 368,988 $ 298,508 $ 267,946
Deferred income taxes(1)......... $ 27,795 $ 35,088 $ 55,722 $ 56,627 $ 80,205
Stockholders' equity............. $ 668,227 $ 668,659 $ 578,415 $ 518,494 $ 483,677
Total debt as a percent of total
capitalization (total debt,
deferred income taxes, negative
goodwill and stockholders'
equity)(1)..................... 38.0% 37.1% 35.8% 33.0% 30.9%
</TABLE>
- ---------------
(1) Excludes debt and deferred income taxes of the mortgage banking subsidiaries
and discontinued savings and loan operations. Reference is made to Note 7
under "Capitalization" in the accompanying Prospectus Supplement and to the
consolidated balance sheet and Note (A) to the Company's Consolidated
Financial Statements included as an exhibit to the Joint Annual Report on
Form 10-K of Centex and 3333 Holding Corporation and Centex Development
Company, L.P., which Annual Report on Form 10-K is incorporated herein by
reference.
4
<PAGE> 11
BUSINESS
GENERAL
Since its founding in 1950 as a Dallas, Texas-based residential and
commercial construction company, Centex has evolved into a multi-industry
company. Centex currently operates in three business segments: Home Building,
Financial Services, and Contracting and Construction Services. Centex also has a
49% interest in Centex Construction Products, Inc., a NYSE-listed company in the
construction products business.
Centex expanded into the real estate development business in fiscal year
1988 by establishing Centex Development Company, L.P., a master limited
partnership ("CDC"). Reference is made to Part B of the Joint Annual Report on
Form 10-K of Centex Corporation and 3333 Holding Corporation and Centex
Development Company, L.P., incorporated herein by reference, for a discussion of
the business of CDC.
HOME BUILDING
The Company's Home Building operations primarily involve the construction
and sale of residential housing, including the purchase and development of land.
The Company's Home Building operations have ranked, by the number of units
produced in a calendar year, as the largest U.S. builder of single-family homes
since 1989. Centex is also the only company to rank among Professional Builder's
top 10 home builders for each of the past 26 years. Centex sells to both first
time and move-up buyers. Approximately 95% of the houses Centex sells are
single-family detached homes and the remainder are townhomes and low-rise
condominiums.
Markets
Centex follows a strategy of reducing exposure to local market volatility
by spreading operations across geographically and economically diverse markets.
Centex presently builds in 44 market areas in 20 states and the United Kingdom.
The markets are listed below by geographic areas.
<TABLE>
<S> <C> <C>
West California -- Seattle, Washington
East Bay Area Reno, Nevada
Sacramento Portland, Oregon
Bakersfield
Riverside/Orange/San Bernadino
Northern Los Angeles/Ventura
Central Valley (Fresno & Visalia)
San Diego
Midwest Chicago, Illinois Indianapolis, Indiana
Minneapolis, Minnesota Columbus, Ohio
Denver, Colorado
East Nashville, Tennessee Atlanta, Georgia
Virginia -- North Carolina --
Northern Virginia Charlotte
Hampton Roads Raleigh/Durham
Maryland South Carolina --
East Windsor, New Jersey Charleston
Columbia
Greenville
Southeast Florida --
Ft. Lauderdale Palm Beach
Jacksonville Bradenton/Sarasota
Naples/Ft. Myers Tampa
Orlando Titusville
</TABLE>
5
<PAGE> 12
<TABLE>
<S> <C> <C>
Southwest Texas -- Phoenix, Arizona
Austin Albuquerque, New Mexico
Dallas/Fort Worth (3 markets)
Houston (2 markets)
Killeen
San Antonio
</TABLE>
In fiscal 1995, Centex closed 12,964 houses, including first time, move-up
and, in some markets, custom homes, ranging in price from approximately $65,000
to about $650,000 with the average sale price being approximately $159,000. In
the Dallas and San Antonio locations, Centex has custom home divisions which
offer higher-end homes.
Summarized below by geographic area are Centex's home closings for the
fiscal years ended March 31, 1995 and 1994, sales (orders) backlog at March 31,
1995 and 1994, and sales (orders) for the fiscal years ended March 31, 1995 and
1994.
<TABLE>
<CAPTION>
FOR THE FISCAL YEARS
ENDED MARCH 31,
--------------------
1995 1994
-------- --------
<S> <C> <C>
CLOSINGS (IN UNITS):
West............................................................. 2,454 1,973
Midwest.......................................................... 1,283 1,114
East............................................................. 2,921 2,599
Southeast........................................................ 2,632 2,895
Southwest........................................................ 3,674 3,982
-------- --------
12,964 12,563
======== ========
AVERAGE SALES PRICE (000'S)...................................... $ 159 $ 147
======== ========
SALES (ORDERS) BACKLOG, AT END OF PERIOD (IN UNITS):
West............................................................. 603 756
Midwest.......................................................... 442 622
East............................................................. 918 1,279
Southeast........................................................ 892 1,387
Southwest........................................................ 1,132 1,751
-------- --------
3,987 5,795
======== ========
SALES (ORDERS) (IN UNITS):
West............................................................. 2,301 2,066
Midwest.......................................................... 1,103 1,275
East............................................................. 2,560 2,686
Southeast........................................................ 2,137 3,022
Southwest........................................................ 3,055 4,158
-------- --------
11,156 13,207
======== ========
</TABLE>
Inventory Turnover
The Company's policy has been to acquire land with the intent to complete
the sale of housing units within 24-36 months from the date of acquisition.
Generally, this involves land that is properly zoned and is either ready for
development or, to a much lesser degree, already developed.
The Company has acquired a substantial amount of its finished and partially
improved lots and land under option agreements which are exercised over
specified time periods, or in certain cases, as the lots are needed. The
purchase of finished lots generally allows the Company to shorten the lead time
to commence construction and reduces the risks of unforeseen improvement costs
and volatile market conditions.
6
<PAGE> 13
Competition and Other Factors
The residential housing industry is essentially a "local" business and is
highly competitive. Centex competes in each of its market areas with numerous
other home builders. The Company's Home Building operations account for less
than 2% of the total housing starts in the United States. The main competitive
factors affecting Centex's Home Building operations are location, price, cost of
providing mortgage financing for customers, construction costs, design and
quality of homes, marketing expertise, availability of land and a builder's
reputation. Management believes the Company competes effectively by maintaining
geographic diversity, being responsive to the specific demands of each market
and managing the operations at a local level.
The home building industry is cyclical and is particularly affected by
changes in local economic conditions and in long-term and short-term interest
rates and, to a lesser extent, changes in property taxes and energy costs,
federal income tax laws, federal mortgage financing programs and various
demographic factors. The political and economic environment affects both the
demand for housing constructed by the Company and the Company's cost of
financing. Unexpected climatic conditions, such as unusually heavy or prolonged
rain or snow, may affect operations in certain areas.
The housing industry is subject to extensive and complex regulations. The
Company and its subcontractors must comply with various federal, state and local
laws and regulations including zoning, building, environmental, advertising and
consumer credit rules and regulations. The Company is also subject to other
rules and regulations in connection with its manufacturing and sales activities,
including requirements as to building materials to be used and building designs.
The Company's homes are inspected by local authorities.
The Company's Home Building operations are subject to numerous federal,
state and local regulatory schemes concerning, among other things, worker health
and safety, zoning, building design, construction materials and the extensive
and changing federal, state and local laws, regulations and ordinances governing
the protection of the environment ("Environmental Laws"), including the
protection of endangered species. All of the foregoing regulatory requirements
are applicable to all home building companies, and to date, compliance with the
foregoing requirements has not had a material impact on the Company. The Company
believes that it is in material compliance with all such requirements.
Centex has numerous suppliers of all the materials and services and sources
of lots and land used in home building and believes that it can deal effectively
with any problems it may experience relating to the supply of materials and
services as well as lots and land.
Vista Acquisition
In December 1994, Centex International, Inc., a wholly-owned subsidiary of
Centex Corporation, entered into an agreement with Dallas-based Vista
Properties, Inc. ("Vista") under which Centex International, Inc. would acquire
dequity interests in Vista and in its affiliated partnership, Vista Partners, as
part of a proposed prepackaged bankruptcy restructuring by Vista. For an
investment of approximately $70 million, Centex would acquire ownership in a
portfolio of properties, comprising over 4,000 acres in seven states. The land
is zoned, planned or developed for: single- and multi-family residential, office
and industrial, and retail and commercial. The acquisition would provide Centex
with future residential sites in several of its existing markets as well as
opportunities in retail, industrial and office segments. The transaction is
expected to be completed during the summer of 1995, subject to the satisfaction
of the conditions stated in the agreement, including approval from Vista's
securityholders and bankruptcy court approval.
United Kingdom Joint Venture
In February 1995, Centex announced its wholly-owned subsidiary, Centex
Homes (UK) Limited, had entered into a joint venture agreement with a
London-area home builder, The Charles Church Group Limited ("Charles Church"),
to build homes in the United Kingdom. The venture is the first entry into the
international home building marketplace for Centex Homes. Centex Homes (UK)
Limited and Charles Church each are contributing $3 million in cash, with the
remaining $9 million financed by a United Kingdom
7
<PAGE> 14
bank, which is guaranteed by Centex. In addition, Centex Homes will transfer
some personnel to the United Kingdom to work on the venture.
The new operation, Charles Church Homes Limited, acquired its first parcel
of undeveloped land in Berkshire County, west of London. Located in Sunningdale,
the parcel consists of 2.1 acres. Homes in the 3,500-4,000 square foot range,
which will sell for approximately $750,000, should be ready for occupancy late
in calendar 1995. Several other potential sites in the London area are currently
being evaluated.
FINANCIAL SERVICES
Financial Services consist of mortgage banking and, until December 1994,
savings and loan operations. The Company's mortgage banking activities are
conducted through Centex's wholly-owned subsidiary, CTX Mortgage Company
("CTX"), which offers mortgage origination and other related services on homes
sold by Centex Homes and by third parties. The savings and loan activities,
which were conducted through Texas Trust Savings Bank, FSB, were sold in
December 1994.
CTX Mortgage Company
CTX was created in 1973 to provide mortgage financing for homes built by
Centex Homes, Centex's home building operation. The establishment by CTX of
mortgage offices in substantially all of Centex Homes' housing markets has
enabled it to consistently provide mortgage financing for an average of 73% of
the homes built by Centex Homes ("Builder Loans") over the past five years. In
1985, CTX expanded its operations to include third-party loans ("Spot Loans")
that are not associated with the sale of homes built by Centex. At March 31,
1995, CTX had 110 offices located in 23 states. The offices vary in size
depending on volume in each locality.
During the 1995 fiscal year, due to the increase in mortgage rates and the
decline in refinancings, CTX downsized its operations. The division's operating
locations and personnel were reduced by approximately 40%. CTX is updating and
expanding its mortgage banking systems, including reautomating its accounting
and loan delivery functions. This process will continue during fiscal 1996.
The unit breakdown of Builder and Spot Loans for the fiscal years ended
March 31, 1995 and 1994 are set forth in the following table:
<TABLE>
<CAPTION>
FOR THE FISCAL
YEARS ENDED MARCH 31,
---------------------
1995 1994
------ ------
<S> <C> <C>
LOAN TYPES:
Builder.......................................................... 8,504 9,289
Spot............................................................. 28,574 49,254
------ ------
37,078 58,543
====== ======
ORIGINATION VOLUME (IN BILLIONS)................................... $4.2 $6.4
PERCENT OF CENTEX CLOSINGS FINANCED................................ 66% 74%
</TABLE>
Centex provides mortgage origination and other mortgage related services
for Federal Housing Administration ("FHA"), Veterans Administration ("VA") and
conventional loans on homes built and sold by the Company or by others. The
Company's mortgage loans are first-lien mortgages secured by 1-4 family
residences. A majority of the conventional loans are conforming loans which
qualify for inclusion in guaranteed programs sponsored by Fannie Mae ("FNMA") or
Freddie Mac ("FHLMC"). The remainder of the conventional loans are pre-approved
and individually underwritten by private investors who purchase such loans on a
whole-loan basis for their investment portfolios.
The principal sources of income from CTX's mortgage banking business are:
loan origination fees; revenues from sale of servicing rights; positive carry
(discussed below); and marketing gains and losses. Generally, CTX sells its
right to service the mortgage loans to various loan servicing companies and
therefore retains no mortgage servicing rights. Accordingly, CTX avoids the risk
of early payoffs and foreclosures. CTX
8
<PAGE> 15
enters into various financial agreements, in the normal course of business, in
order to manage the exposure to changing interest rates as a result of having
issued loan commitments to its customers at a specified price and period and
committing to sell mortgage loans to various investors. By immediately selling
the mortgages for future delivery, substantially all interest rate risk is
removed at the time of closing.
CTX borrows money at short-term rates to fund its mortgage loans. During
the 30- to 60-day period between closing of a loan and delivery of such loan to
the ultimate purchaser, CTX earns the interest accrued on the loan itself, which
is normally a higher interest rate than the rate paid on the short-term loans
used to fund the mortgage during this 30- to 60-day holding period. This
positive spread between the long-term interest rate earned and the short-term
interest rate paid is referred to as "positive carry," and generally represents
a major source of income.
Competition and Other Factors
The mortgage banking industry in the United States is highly competitive.
CTX competes with other mortgage banking companies as well as financial
institutions to supply mortgage financing at attractive rates to purchasers of
Centex homes as well as the general public. Mortgage banking results in fiscal
1995 were negatively impacted by an increasingly competitive environment.
Rapidly rising interest rates commencing in February 1994 virtually stopped
refinancing activity and caused consumers to shift from more profitable fixed-
rate mortgages to lower-margin adjustable rate products.
CTX is subject to the rules and regulations of, and examinations by, the
Federal National Mortgage Association ("FNMA"), the Federal Home Loan Mortgage
Corporation ("FHLMC"), the Department of Veterans' Affairs ("VA"), the Federal
Housing Administration ("FHA"), the Government National Mortgage Association
("GNMA") and state regulatory authorities with respect to originating,
processing, underwriting, making, selling, securitizing and servicing
residential mortgage loans. In addition, there are other federal and state
statutes and regulations affecting such activities. These rules and regulations,
among other things, impose licensing obligations on CTX, establish eligibility
criteria for mortgage loans, provide for inspection and appraisals of
properties, regulate payment features and, in some cases, fix maximum interest
rates, fees and loan amounts. CTX is required to maintain specified net worth
levels by, and submit annual audited financial statements to FHA, VA, FNMA,
FHLMC and GNMA and certain state regulators. CTX's affairs are also subject to
examination by the Federal Housing Commissioner at all times to assure
compliance with FHA regulations, policies and procedures. Among other federal
and state consumer credit laws, mortgage origination and servicing activities
are subject to the Equal Credit Opportunity Act, the Federal Truth-In-Lending
Act, the Real Estate Settlement Procedures Act ("RESPA") and the regulations
promulgated under such statutes, which prohibit discrimination and unlawful
kickbacks and referral fees and require the disclosure of certain information to
borrowers concerning credit and settlement costs. Many of these regulatory
requirements are designed to protect the interest of consumers, while others
protect the owners or insurers of mortgage loans. Failure to comply with these
requirements can lead to loss of approved status, demands for indemnification or
loan repurchases from investors, class action lawsuits by borrowers,
administrative enforcement actions and, in some cases, rescission or voiding of
the mortgage loan by the mortgagor.
Other financial-related services provided by CTX affiliates include acting
as an agent for the issuance of homeowners' insurance policies, title insurance
policies and escrow services. CTX Insurance Agency provides hazard insurance to
home buyers in Texas and Florida through third-party insurance companies. During
fiscal 1994, CTX opened its first commercial loan operation. In the current
fiscal year, CTX entered into a joint venture agreement with another home
builder to provide mortgage origination for homes built by this home builder. In
addition, during fiscal 1995, an affiliate of CTX entered the second lien market
whereby this CTX affiliate will originate second mortgages for home improvements
and home equity lines of credit. The affiliate utilizes CTX's branch network and
telemarketing to solicit potential customers.
Savings and Loan
In December 1988, Centex purchased certain assets and assumed certain
liabilities of four Texas savings and loan associations under the Federal
Savings and Loan Insurance Corporation's assisted transactions
9
<PAGE> 16
process commonly known as the "Southwest Plan". The acquisition was made by
Texas Trust Savings Bank, FSB ("Texas Trust"), a federal stock savings bank and
an indirect wholly-owned subsidiary of Centex. The acquisition was made pursuant
to acquisition agreements and an assistance agreement (the "Assistance
Agreement") with the Federal Savings and Loan Insurance Corporation (the
"FSLIC").
During December 1994, the Assistance Agreement with the Federal Deposit
Insurance Corporation (as successor to the FSLIC) was terminated. On December
30, 1994 Texas Trust's eight branch facilities were sold to a financial
institution and all deposit liabilities were assumed by the purchaser. On the
same day, immediately following the branch sale, Texas Trust was dissolved,
thereby completing Centex's exit from the savings and loan industry.
CONTRACTING AND CONSTRUCTION SERVICES
Centex's contracting and construction services work is performed
nationwide. As a group, Centex's Contracting and Construction Services
subsidiaries rank as one of the largest building contractors in the country as
well as one of the largest U.S.-owned construction groups. The Construction
Group is made up of seven firms with various geographic locations and project
niches. The overall group is heavily weighted towards health care which
represents nearly 40% of its mix. New contracts for fiscal 1995 totaled $1.15
billion versus $1.03 billion for fiscal 1994. The backlog of uncompleted
contracts at March 31, 1995 was $1.33 billion, compared to $1.24 billion at
March 31, 1994. The group's principal subsidiaries are as follows:
CENTEX BATESON CONSTRUCTION COMPANY, INC. - This Dallas-based
contractor (acquired in 1966) has become one of the nation's larger general
contractors specializing in government and competitively-bid jobs. Its
projects are nationwide.
CENTEX-ROONEY CONSTRUCTION COMPANY, INC. - This Ft. Lauderdale-based
subsidiary was acquired in 1978 and is one of the largest general
contractors in the state of Florida. It operates primarily in Florida and
handles predominantly negotiated work for private owners.
CENTEX GOLDEN CONSTRUCTION COMPANY - This company (acquired in fiscal
1982) operates in the San Diego, Los Angeles and Northern California
markets, handling both negotiated and competitively-bid work.
CENTEX-SIMPSON CONSTRUCTION COMPANY - This contractor (organized in
1966) is based in the Washington D. C. area and is engaged primarily in
competitively-bid work for the public sector.
CENTEX-RODGERS CONSTRUCTION COMPANY - This company (organized in 1987)
is headquartered in Nashville, Tennessee, and is active nationally in the
private medical construction services market.
CENTEX GREAT SOUTHWEST CORPORATION - This subsidiary (acquired in
1978) builds principally in the Tampa and Orlando areas and is a leading
builder of airport terminals.
CENTEX FORCUM LANNOM, INC. - This industrial contracting company
(acquired in 1990) is located in Dyersburg, Tennessee and operates in
Tennessee and surrounding states.
As a general contractor or construction manager, Centex provides the
supervisory personnel for the construction of the building or facility. In
addition, Centex may perform varying amounts of the actual construction work on
a project, but will generally hire subcontractors to perform the majority of the
work. As a result, the Company's Contracting and Construction Services operation
requires a relatively small asset base.
Construction contracts are primarily entered into under two formats:
competitively-bid and negotiated jobs. In a competitively-bid format, Centex
will bid a fixed amount for which it will agree to construct the project based
on an evaluation of detailed plans and specifications. In a negotiated job, the
contractor bids on a fixed fee over the cost of the project and, in many
instances, agrees that the final cost will not exceed a designated amount. Such
contracts may include a provision whereby the owner will pay a part of any
savings from the guaranteed amount to the contractor. The Company's highest
margins in contracting operations have usually been on competitively-bid jobs.
Currently, the margins on competitively-bid and negotiated jobs are about equal.
On average, about half of Centex's projects are competitively bid, public jobs
and the other half
10
<PAGE> 17
are negotiated contracts with private owners. The Company's public work for
federal, state and local governments includes hospitals, jails, airports,
parking garages, office buildings, military facilities, post offices and
convention and performing arts centers. Most of Centex's private owner contracts
are for hotels, medical facilities and office buildings, plus some shopping
centers and condominiums.
Competition and Other Factors
The construction industry has become increasingly competitive, and Centex
competes with numerous other companies. With respect to competitively bid
projects, Centex generally competes for projects throughout the United States
and with local, regional and national contractors, depending upon the nature of
the project. For negotiated projects, Centex's subsidiaries compete primarily in
the general geographical area where they are located and with other local,
regional and national contractors. Centex solicits new projects by attending
project bid meetings and meeting with builders and owners and through existing
customers. Centex competes successfully on the basis of its reputation and
financial strength.
The Company's Contracting and Construction Services operations are affected
by federal, state and local laws and regulations relating to worker health and
workplace safety as well as Environmental Laws. With respect to health and
safety matters, the Company believes that appropriate precautions are taken to
protect employees and others from workplace hazards. Current Environmental Laws
may require the Company's operating subsidiaries to work in concert with project
owners to acquire the necessary permits or other authorizations for certain
activities, including the construction of projects located in or near wetland
areas. The Company's Contracting and Construction Services operations are also
affected by Environmental Laws regulating the use and disposal of hazardous
materials encountered during demolition operations.
The Company believes that the Contracting and Construction Services group's
current procedures and practices are consistent with industry standards and that
compliance by the Construction Group with the health and safety laws and
Environmental Laws does not constitute a material burden or expense for the
Company.
The Company's Contracting and Construction Services operations obtain
materials and services from numerous sources. The Company believes that its
construction companies can deal effectively with any problems they may
experience in the supply of materials and services.
CONSTRUCTION PRODUCTS
Centex, through its 49% ownership of Centex Construction Products, Inc.
("CXP"), is a producer of a variety of basic construction products used in
residential, industrial, commercial and infrastructure applications. CXP
produces and sells cement, aggregates, readymix concrete and gypsum wallboard.
CXP's operations are strategically located in various regions of the United
States, many of which offer attractive prospects for long-term growth.
In April 1994, the Company's formerly wholly-owned construction products
subsidiary, CXP, completed the sale of 11,730,000 shares, or 51%, of its common
stock through an initial public offering. Including dividend and other payments,
Centex received $186.5 million from the transaction and used the funds to reduce
its short-term debt. Centex retains ownership of 49% of CXP's stock. The Company
believes that, as a separate public entity, CXP will be better positioned to
expand its existing operations, take advantage of acquisition opportunities and
otherwise implement its business strategy based on considerations directly
relevant to a construction products enterprise.
LEGAL PROCEEDINGS
Management believes that no litigation in which the Company or any
subsidiary is involved, if determined adversely to Centex or any subsidiary,
would have a material adverse effect on the consolidated financial condition or
results of operations of the Company.
11
<PAGE> 18
DESCRIPTION OF SUBORDINATED DEBT SECURITIES
GENERAL
The Subordinated Debt Securities will be issued in one or more series under
an Indenture dated as of March 12, 1987 (the "Indenture"), as supplemented from
time to time by a supplemental indenture with respect to each series
("Supplemental Indenture"), between the Company and Texas Commerce Bank National
Association, as trustee (the "Trustee").
The following summaries of certain provisions of the Indenture do not
purport to be complete and are subject to, and qualified in their entirety by
reference to, all provisions of the Indenture and the related Supplemental
Indenture, including the definitions of certain terms contained in the
Indenture. In particular, the term "Company" as used in the Indenture and the
related Supplemental Indenture and in this section means Centex Corporation
without its subsidiaries. Copies of the Indenture and Supplemental Indenture
have been or will be filed as exhibits with the Commission. Wherever particular
sections or defined terms of the Indenture are referred to, such sections or
defined terms are incorporated herein by reference. Capitalized terms not
otherwise defined herein shall have the respective meanings given to them in the
Indenture. Article and section numbers set forth below refer to provisions of
the Indenture.
The particular terms of each series of Subordinated Debt Securities, as
well as any modification or addition to the general terms of the Subordinated
Debt Securities as herein described, which may be applicable to a particular
series of Subordinated Debt Securities, are described in the Prospectus
Supplement relating to such series of Subordinated Debt Securities and will be
set forth in a filing with the Commission. Accordingly, for a description of the
terms of a particular series of Subordinated Debt Securities, reference must be
made to both the Prospectus Supplement relating to such series and the
description of Subordinated Debt Securities set forth in this Prospectus.
The Subordinated Debt Securities will be unsecured obligations of the
Company. The Subordinated Debt Securities offered hereby will be limited to
Subordinated Debt Securities having an aggregate principal amount not to exceed
$100,000,000 or the equivalent thereof in any currency, although the Indenture
provides that additional subordinated debt securities may be issued thereunder
up to the aggregate principal amount, which is not limited by the Indenture,
authorized from time to time by the Company's Board of Directors. The Company
may from time to time, without the consent of the holders of any of the
Subordinated Debt Securities offered hereby, authorize the issuance of future
series of Subordinated Debt Securities in addition to those authorized as of the
date of this Prospectus or any related Prospectus Supplement. See
"Capitalization" in the accompanying Prospectus Supplement and "Description of
Subordinated Debt Securities -- Subordination" herein for information relating
to (i) $120,000,000 aggregate principal amount of subordinated debt securities
previously issued by the Company under the Indenture, which subordinated debt
securities rank equally in right of payment to any Subordinated Debt Securities
offered hereby, and (ii) $100,000,000 aggregate principal amount of 9.05% senior
notes due May 1, 1996, previously issued by the Company under another indenture,
which Senior Notes are included within the definition of Senior Indebtedness
described below under "Subordination".
Because the Company conducts its business through subsidiaries, the Company
is dependent upon the receipt of dividends, interest and other payments from its
subsidiaries to be able to service its outstanding debt obligations, including
the payment of interest on and principal of Subordinated Debt Securities. At the
present time, a $300 million warehouse loan agreement of CTX (containing a net
worth requirement applicable to CTX) constitutes the only contractual covenant
that could restrict the ability of a subsidiary to pay dividends or make other
payments to the Company. Subject to compliance with such net worth requirement,
CTX is not currently restricted under this loan agreement from making any such
payments to the Company. The ability of the Company's subsidiaries to pay
dividends to the Company is also subject to applicable corporation law
requirements relative to the adequacy of their respective capital surplus and/or
earnings. At the present time, none of such requirements would preclude any
subsidiary from paying dividends to the Company. Because the Company conducts
its business through subsidiaries, the Company's rights and the rights of its
creditors, including the holders of Subordinated Debt Securities offered hereby,
to participate in the assets of any subsidiary upon the latter's liquidation or
recapitalization will be subject to the prior claims of the subsidiary's
12
<PAGE> 19
creditors, except to the extent that the Company may itself be a creditor with
recognized claims against the subsidiary. As of March 31, 1995, subsidiaries of
the Company had approximately $373 million principal amount of debt outstanding
to third party creditors. The Indenture under which the Subordinated Debt
Securities are to be issued does not contain any limitation on the ability of
the Company to incur additional debt or on the ability of the Company's
subsidiaries to incur additional debt to the Company or to unaffiliated third
parties. In addition, in connection with managing the working capital needs of
the Company and its subsidiaries, from time to time the Company borrows funds
and lends funds to its subsidiaries. Any such borrowing by the Company from a
subsidiary is included within the definition of Senior Indebtedness, to which
the Subordinated Debt Securities will be subordinated, except as hereinafter
provided. See "Capitalization" in the accompanying Prospectus Supplement and
"Description of Subordinated Debt Securities -- Subordination" herein.
In addition to the provisions of the Subordinated Debt Securities which may
be hereinafter described, the Prospectus Supplement relating to each particular
series of Subordinated Debt Securities will set forth or describe: (1) the title
of such Subordinated Debt Securities; (2) any limit on the aggregate principal
amount of such Subordinated Debt Securities; (3) the percentage of their
principal amount at which such Subordinated Debt Securities will be issued; (4)
the date or dates on which such Subordinated Debt Securities will mature; (5)
the rate or rates per annum (which may be fixed or variable), or the method by
which such rate or rates shall be determined, at which such Subordinated Debt
Securities will bear interest, if any; (6) the date or dates from which any such
interest shall accrue, or the method by which such date or dates shall be
determined, and the times at which any such interest will be payable; (7) the
period or periods within which, the price or prices at which and the terms and
conditions upon which such Subordinated Debt Securities may be redeemed, in
whole or in part, at the option of the Company or the holder, if the Company or
the holder is to have such an option; (8) the obligation, if any, of the Company
to redeem, repay or purchase such Subordinated Debt Securities pursuant to any
sinking fund or analogous provision and the period or periods within which, the
price or prices at which and the terms and conditions upon which such
Subordinated Debt Securities shall be redeemed, repaid or purchased, in whole or
part, pursuant to such obligation; (9) the denominations in which such
Subordinated Debt Securities are authorized to be issued and the currencies in
which such Subordinated Debt Securities are issued or payable; (10) any
additional restrictive covenants included for the benefit of holders of such
Subordinated Debt Securities, including a description of any so-called "event
risk" covenants or other Indenture provisions affording holders of such
Subordinated Debt Securities specific protection in the event of a highly
leveraged transaction involving the Company, and a description of the ability of
the Company's Board of Directors to waive any such provisions (or, if there are
no such covenants or provisions, a statement to that effect); (11) any
additional Event of Default with respect to such Subordinated Debt Securities;
and (12) any other terms of such Subordinated Debt Securities not inconsistent
with the provisions of the Indenture or any provisions expressly amending the
Indenture with respect to the series of Subordinated Debt Securities to which
such Prospectus Supplement relates.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
principal of and premium, if any, and interest on the Subordinated Debt
Securities will be payable, and the Subordinated Debt Securities will be
exchangeable and transfers thereof will be registrable, at the office or agency
of the Company designated for that purpose in New York, New York (initially the
office of an affiliate of the Trustee), and Houston, Texas (initially the office
of the Trustee), and any other office or agency of the Company designated for
that purpose, provided that, at the option of the Company, payment of any
interest may be made by check mailed to the address of the person entitled
thereto as it appears in the Subordinated Debt Security Register. (Sections
2.04, 2.06 and 5.02.)
The Company will from time to time execute and deliver Subordinated Debt
Securities to the Trustee for authentication and delivery, and the Trustee will
authenticate and deliver such Subordinated Debt Securities upon written order of
the Company. No service charge will be made for any transfer or exchange of the
Subordinated Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. (Section 2.06.)
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<PAGE> 20
SUBORDINATION
Except as hereinafter provided, the payment of the principal of and
premium, if any, and interest on, and sinking fund requirements for, the
Subordinated Debt Securities (to the extent applicable) will be subordinated and
junior in right of payment, to the extent and in the manner set forth in the
Indenture, to the prior payment in full of all Senior Indebtedness of the
Company. Subject to modification, if any, as set forth in the related Prospectus
Supplement, the term "Senior Indebtedness" is defined as (a) the principal of
and premium, if any, and interest on (i) all indebtedness of the Company (other
than the Subordinated Debt Securities, other series of subordinated debt
securities of the Company issued under the Indenture, and the Company's
convertible subordinated debenture referenced below), whether currently
outstanding or hereafter created, for money borrowed by the Company or borrowed
by others and guaranteed by the Company, including, without limitation,
indebtedness to subsidiaries, (ii) Capitalized Lease Obligations of the Company,
whenever incurred, (iii) all indebtedness arising in favor of any bonding
company under any performance or payment bond or other similar bond issued by a
company in connection with any construction contract to which the Company is or
was a party, and (iv) indebtedness or obligations incurred, assumed or
guaranteed by the Company in connection with the acquisition or improvement of
any property or asset, tangible or intangible (including, without limitation,
services or materials purchased or contracted for purchase in the ordinary
course of the Company's business), or the acquisition of any business, unless,
in each case referred to in clauses (i), (ii), (iii) and (iv) above, by the
terms of the instrument creating or evidencing any such indebtedness it is
expressly provided that such indebtedness is on a parity with, or otherwise not
superior in right of payment to, the Subordinated Debt Securities; (b) any other
indebtedness, liability or obligation, contingent or otherwise, of the Company
and any guarantee, endorsement or other contingent obligation in respect of any
indebtedness, liability or obligation of another created, assumed or incurred by
the Company after the date of the Indenture, which is, when created, assumed or
incurred, specifically designated by the Company as Senior Indebtedness of the
Company with respect to the Subordinated Debt Securities; and (c) any
refundings, renewals or extensions of any indebtedness or other obligation
described in clause (a) or (b) above. (Section 1.01.) The Company's $100,000,000
aggregate principal amount of 9.05% senior notes due May 1, 1996, previously
issued under another indenture, are included within the definition of Senior
Indebtedness. As noted above under "Description of Subordinated Debt
Securities -- General," any borrowings by the Company from its subsidiaries are
also included within the definition of Senior Indebtedness.
The Indenture does not contain any limitation on the amount of Senior
Indebtedness or any other kind of indebtedness that may be incurred by the
Company after the date of this Prospectus. The aggregate amount of the Company's
Senior Indebtedness at March 31, 1995 was approximately $534.8 million, $230.8
million of which represented indebtedness owed by the Company to its
subsidiaries. See "Capitalization" in the accompanying Prospectus Supplement and
"Description of Subordinated Debt Securities -- General" herein.
The Indenture provides that the indebtedness evidenced by the Subordinated
Debt Securities ranks on a parity with the Company's $2,100,000 convertible
subordinated note due in the year 2000, is entitled to like rights of
subrogation and is otherwise not superior in right of payment to such note.
(Section 3.02.) All series of Subordinated Debt Securities as well as other
series of subordinated debt securities of the Company issued under the
Indenture, including the Company's $100,000,000 8.75% subordinated debentures
due March 1, 2007 and its $20,000,000 8.80% subordinated debentures due June 30,
2007, will rank equally with each other.
Except as hereinafter provided, the Indenture prohibits any payment by the
Company of principal of or premium, if any, or interest on, or sinking fund
requirements for, the Subordinated Debt Securities during the continuance of any
default in respect of certain Senior Indebtedness of the Company or any default
under any agreement pursuant to which such Senior Indebtedness of the Company
was issued beyond the period of grace, unless and until such default on such
Senior Indebtedness of the Company shall have been cured or waived. (Section
3.02.)
Except as hereinafter provided, upon any distribution of assets of the
Company in connection with any dissolution, winding up, liquidation,
reorganization, bankruptcy or other similar proceeding relative to the Company,
its creditors or its property, the holders of all Senior Indebtedness of the
Company will first be entitled to receive payment in full of the principal
thereof and premium, if any, and interest due thereon before
14
<PAGE> 21
the holders of the Subordinated Debt Securities are entitled to receive any
payment of the principal of and premium, if any, or interest on the Subordinated
Debt Securities. (Section 3.02.) By reason of such subordination, in the event
of insolvency, creditors of the Company who are not holders of Senior
Indebtedness of the Company or of the Subordinated Debt Securities may recover
less, ratably, than holders of Senior Indebtedness of the Company but may
recover more, ratably, than holders of the Subordinated Debt Securities.
Chemical Bank, an affiliate of the Trustee, serves as trustee with respect
to the Senior Notes described above. See "Description of Subordinated Debt
Securities -- The Trustee" herein.
GLOBAL SECURITIES
The Subordinated Debt Securities of a series may be issued in whole or in
part in the form of one or more Global Securities that will be deposited with or
on behalf of a depository located in the United States (a "Depository")
identified in the Prospectus Supplement relating to such series.
The specific terms of the depository arrangements with respect to any
Subordinated Debt Securities of a series will be described in the Prospectus
Supplement relating to such series. The Company anticipates that the following
provisions will apply to all depository arrangements.
Unless otherwise specified in an applicable Prospectus Supplement,
Subordinated Debt Securities which are to be represented by a Global Security to
be deposited with or on behalf of a Depository will be represented by a Global
Security registered in the name of such depository or its nominee. Upon the
issuance of a Global Security in registered form, the Depository for such Global
Security will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Subordinated Debt Securities represented by
such Global Security to the accounts of institutions that have accounts with
such Depository or its nominee ("participants"). The accounts to be credited
shall be designated by the underwriters or agents of such Subordinated Debt
Securities or by the Company, if such Subordinated Debt Securities are offered
and sold directly by the Company. Ownership of beneficial interests in such
Global Securities will be limited to participants or persons that may hold
interests through participants. Ownership of beneficial interests by
participants in such Global Securities will be shown on, and the transfer of
that ownership interest will be effected only through, records maintained by the
Depository or its nominee for such Global Securities. Ownership of beneficial
interests in Global Securities by persons that hold through participants will be
shown on, and the transfer of that ownership interest within such participant
will be effected only through, records maintained by such participant. The laws
of some jurisdictions require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such limits and such
laws may impair the ability to transfer beneficial interests in a Global
Security.
So long as the Depository for a Global Security in registered form, or its
nominee, is the registered owner of such Global Security, such Depository or
such nominee, as the case may be, will be considered the sole owner or holder of
the Subordinated Debt Securities of the series represented by such Global
Security for all purposes under the Indenture governing such Subordinated Debt
Securities. Except as set forth below, owners of beneficial interests in such
Global Security will not be entitled to have Subordinated Debt Securities of the
series represented by such Global Security registered in their names, will not
receive or be entitled to receive physical delivery of Subordinated Debt
Securities of such series in definitive form, and will not be considered the
owners or holders thereof under the Indenture.
Payment of principal of, premium, if any, and any interest on Subordinated
Debt Securities of a series registered in the name of or held by a Depository or
its nominee will be made to the Depository or its nominee, as the case may be,
as the registered owner or the holder of the Global Security representing such
Subordinated Debt Securities. None of the Company, the Trustee, any Paying
Agent, or the Subordinated Debt Security Registrar for such Subordinated Debt
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a Global Security for such Subordinated Debt Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
15
<PAGE> 22
The Company expects that the Depository for Subordinated Debt Securities of
a series, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security, will credit immediately participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the principal amount of such Global Security as shown on the
records of the Depository. The Company also expects that payments by
participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name," and such payments will
be the responsibility of such participants. However, the Company has no control
over the practices of the Depository and/or the participants and there can be no
assurance that these practices will not be changed.
A Global Security may not be transferred except as a whole by the
Depository for such Global Security to a nominee of such Depository or by a
nominee of such Depository to such Depository or another nominee of such
Depository or by such Depository or any such nominee to a successor of such
Depository or a nominee of such successor. If a Depository for Subordinated Debt
Securities of a series is at any time unwilling or unable to continue as
depository and a successor depository is not appointed by the Company within 90
days, the Company will issue Subordinated Debt Securities in definitive
registered form in exchange for the Global Security or Securities representing
such Subordinated Debt Securities. In addition, the Company may at any time and
in its sole discretion determine not to have any Subordinated Debt Securities of
a series in registered form represented by one or more Global Securities and, in
such event, will issue Subordinated Debt Securities in definitive form in
exchange for the Global Security or Securities representing such Subordinated
Debt Securities. In any such instance, an owner of a beneficial interest in a
Global Security will be entitled to physical delivery in definitive form of
Subordinated Debt Securities of the series represented by such Global Security
equal in principal amount to such beneficial interest and to have such
Subordinated Debt Securities registered in its name.
EVENTS OF DEFAULT AND NOTICE THEREOF
The Indenture defines an Event of Default with respect to any series of
Subordinated Debt Securities as being any one of the following events and such
other events as may be established for the Subordinated Debt Securities of a
particular series (as set forth in the related Prospectus Supplement): (a)
failure to pay interest on the Subordinated Debt Securities when due, continued
for 30 days; (b) failure to pay (whether or not prohibited by the subordination
provisions) principal (including any sinking fund installment) of or premium, if
any, on the Subordinated Debt Securities when due; (c) failure to observe or
perform any other covenant of the Company set forth in the Indenture or the
Subordinated Debt Securities of such series, continued for 60 days after notice
as provided in the Indenture; and (d) certain events of bankruptcy, insolvency
or reorganization in respect of the Company. (Section 7.01.)
Within 90 days after the occurrence of a Default known to the Trustee, the
Trustee is required to transmit notice thereof to the holders of the
Subordinated Debt Securities. Except in the case of a default in the payment of
the principal of (or premium, if any) or interest on any Subordinated Debt
Security, or in the payment of any sinking fund installment, the Trustee may
withhold such notice if and so long as it in good faith determines that the
withholding of such notice is in the interests of holders of the Subordinated
Debt Securities. (Section 7.07.) If an Event of Default in respect of a
particular series of Subordinated Debt Securities shall occur and be continuing,
the Trustee or the holders of not less than 25% in aggregate principal amount of
the Subordinated Debt Securities of such series outstanding may declare the
principal of such series due and payable immediately. (Section 7.01.) However,
if prior to the entry of any judgment or decree for the accelerated amount, the
Company shall pay or deposit with the Trustee all principal, premium, if any,
and interest arrearage, then the holders of not less than a majority in
aggregate principal amount of the Subordinated Debt Securities of the affected
series shall have the right to waive all defaults and the consequences of having
declared all principal payments due. Such waiver will not, however, be operative
as against nor impair any rights arising as a result of any subsequent Event of
Default with respect to such series. (Section 7.01.) The Trustee will not be
charged with knowledge of any Event of Default other than the Company's failure
to make principal and interest payments unless actual written notice thereof is
received by
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<PAGE> 23
the Trustee. (Section 7.01.) No Event of Default with respect to a particular
series of Subordinated Debt Securities necessarily constitutes an Event of
Default with respect to any other series of Subordinated Debt Securities.
The Indenture contains provisions regarding limitations on the right to
institute legal proceedings. No holder of any Subordinated Debt Securities of a
particular series shall have the right to institute an action or proceeding for
rights arising under the Indenture unless (i) such holder has given written
notice of default to the Trustee; (ii) the holders of not less than 25% of the
aggregate principal amount of Subordinated Debt Securities of such series shall
have made a written request to the Trustee to institute an action and offered
the Trustee such reasonable indemnification as it may require; (iii) the Trustee
shall not have commenced such action within 60 days of receipt of such notice
and indemnification offer; and (iv) no direction inconsistent with such request
has been given to the Trustee by the holders of not less than a majority of the
aggregate principal amount of the Subordinated Debt Securities of such series
then outstanding. Notwithstanding the foregoing, subject to applicable law and
any applicable subordination provisions, nothing shall prevent the holders of
Subordinated Debt Securities from enforcing payment of the principal of or
premium, if any, or interest on their Subordinated Debt Securities. No holder of
Subordinated Debt Securities of a particular series may have the right to
prejudice the rights or obtain priority or preference over the rights of any
other holder of Subordinated Debt Securities of such series. (Section 7.04.)
The holders of a majority in aggregate principal amount of the Subordinated
Debt Securities of such series outstanding at the time may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee, provided,
however, that the Trustee shall have the right to decline to follow such
direction if, being advised by counsel, the Trustee determines that the action
so directed may not lawfully be taken, or if the Trustee in good faith
determines that the action so directed would be unduly prejudicial to the
holders of the Subordinated Debt Securities not taking part in such action or
would involve the Trustee in personal liability. (Section 7.06.)
The Indenture provides that, in case an Event of Default in respect of a
particular series of Subordinated Debt Securities shall occur (which shall not
have been cured or waived), the Trustee will be required to use the degree of
care of a prudent man in the conduct of his own affairs. (Section 8.01.) Subject
to such provisions, the Trustee will be under no obligation to exercise any of
its rights or power under the Indenture at the request of any of the holders of
the Subordinated Debt Securities of such series unless they shall have offered
to the Trustee reasonable security or indemnity. (Section 8.02.)
The Company will be required to furnish to the Trustee annually a statement
as to the fulfillment by the Company of all of its obligations under the
Indenture. (Section 5.06.)
DEFEASANCE
The Company may terminate its obligations under the Indenture with respect
to the Subordinated Debt Securities of a series at any time by acquiring and
delivering all outstanding Subordinated Debt Securities of such series to the
Trustee for cancellation. The Company may also terminate all of its obligations
under the Indenture with respect to the Subordinated Debt Securities of a
series, other than its obligations in respect of payment of principal of and
interest on the Subordinated Debt Securities of such series, at any time by
depositing in trust with the Trustee money or non-callable U.S. Government
Obligations sufficient to pay all remaining indebtedness on the Subordinated
Debt Securities of such series. Money or securities so deposited in trust with
the Trustee is for the sole benefit of the holders of the Subordinated Debt
Securities of such series and, to the extent allocated for payment of the
Subordinated Debt Securities of such series, shall not be subject to the
subordination provisions of the Indenture. (Sections 3.09 and 13.01.)
MERGER AND CONSOLIDATION
The Company may merge with another corporation if the Company is the
surviving corporation, or may consolidate with or merge into another corporation
or transfer all or substantially all of its assets to another corporation if the
resulting, surviving or transferee corporation assumes all obligations of the
Company under
17
<PAGE> 24
the Subordinated Debt Securities of each series and the Indenture, and is not
immediately thereafter in default under any covenant in the Indenture. (Article
Twelve.)
MODIFICATION OF THE INDENTURE
With the consent of the holders of not less than a majority in aggregate
principal amount of the outstanding Subordinated Debt Securities of a particular
series, the Indenture, the rights and obligations of the Company and the rights
of the holders of such series of Subordinated Debt Securities may be modified by
the Company and the Trustee. However, no modification of the terms of payment of
principal of or premium, if any, or interest on Subordinated Debt Securities of
any series, and no modification reducing the percentage of outstanding
Subordinated Debt Securities of a series required for modification, will be
effective against any holder of a Subordinated Debt Security of such series
affected thereby without the holder's consent. The Company and the Trustee may
also enter into supplemental indentures, without obtaining the consent of the
holders of any series of Subordinated Debt Securities, to cure any ambiguity or
to correct or supplement any provision of the Indenture or any supplemental
indenture which may be defective or inconsistent with any other provision, to
pledge any property to or with the Trustee or to make any other provisions with
respect to matters or questions arising under the Indenture, provided that such
action shall not adversely affect the interests of the holders of the
Subordinated Debt Securities. Such supplemental indentures may also be entered
into without the consent of holders of any series of Subordinated Debt
Securities to set forth the terms of additional series of Subordinated Debt
Securities, to evidence the succession of another person to the Company or to
add to the covenants of the Company. (Article Eleven.)
CERTIFICATES AND OPINIONS TO BE FURNISHED TO TRUSTEE
The Indenture provides that, in addition to such other certificates or
opinions as may be specifically required by other provisions of the Indenture,
every application by the Company for action by the Trustee shall be accompanied
by a certificate of certain officers of the Company and an opinion of counsel
(who may be counsel for the Company) stating that, in the opinion of the
signers, all conditions precedent to such action have been complied with.
(Section 15.07.)
RATINGS
Particular series of Subordinated Debt Securities may be rated by one or
more nationally recognized statistical rating agencies. The rating agency or
agencies and rating or ratings to be assigned with respect to such series of
Subordinated Debt Securities will be specified in the related Prospectus
Supplement.
REPORT TO HOLDERS OF DEBT SECURITIES
Audited financial statements of the Company will be provided annually to
holders of Subordinated Debt Securities. (Section 6.03.) The Trustee is required
to submit an annual report to the holders of the Subordinated Debt Securities
regarding, among other things, the Trustee's eligibility to serve as such, the
priority of the Trustee's claims regarding certain advances made by it, and any
action taken by the Trustee materially affecting the Subordinated Debt
Securities.
THE TRUSTEE
Texas Commerce Bank National Association, whose Corporate Trust Office is
located at 600 Travis, Eighth Floor, Houston, Texas 77002, will be the Trustee
under the Indenture with respect to each series of Subordinated Debt Securities
issued thereunder. Texas Commerce Bank National Association also serves as
indenture trustee with respect to the Company's $100,000,000 8.75% subordinated
debentures due March 1, 2007 and its $20,000,000 8.80% subordinated debentures
due June 30, 2007 previously issued under the Indenture, as supplemented by a
Supplemental Indenture dated as of March 12, 1987, and a Supplemental Indenture
dated as of June 17, 1987. Chemical Bank, an affiliate of the Trustee, serves as
indenture trustee with respect to the Company's $100,000,000 aggregate principal
amount of 9.05% senior notes due May 1, 1996, previously issued under an
Indenture dated May 1, 1991, as supplemented by a Supplemental Indenture
18
<PAGE> 25
dated as of May 10, 1991. See "Description of Subordinated Debt
Securities -- Subordination". Centex and its affiliates maintain other banking
relationships in the ordinary course of business with the Trustee and its
affiliates, including Texas Commerce Bank -- Dallas, N.A.
The Trustee may resign or be removed with respect to one or more series of
Subordinated Debt Securities and a successor trustee may be appointed to act
with respect to any such series. (Section 8.10.)
The Indenture will contain certain limitations on the right of the Trustee,
in the event that it becomes a creditor of the Company, to obtain payment of
claims in certain cases, or to realize on certain property received in respect
of any such claim as security or otherwise. (Section 8.13.)
PLAN OF DISTRIBUTION
The Company may sell Subordinated Debt Securities to or through
underwriters, and also may sell Subordinated Debt Securities directly to other
purchasers or through agents.
The distribution of the Subordinated Debt Securities may be effected from
time to time in one or more transactions at a fixed price or prices, which may
be changed, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices.
In connection with the sale of Subordinated Debt Securities, underwriters
may receive compensation from the Company, or from purchasers of Subordinated
Debt Securities for whom they may act as agents, in the form of discounts,
concessions or commissions. Underwriters may sell Subordinated Debt Securities
to or through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or commissions
from the purchasers for whom they may act as agents. Underwriters, dealers and
agents that participate in the distribution of Subordinated Debt Securities may
be deemed to be underwriters, and any discounts or commissions received by them
from the Company and any profit on the resale of Subordinated Debt Securities by
them may be deemed to be underwriting discounts and commissions, under the
Securities Act of 1933, as amended (the "Act"). Any such underwriter or agent
will be identified, and any such compensation received from the Company will be
described, in the Prospectus Supplement.
The Subordinated Debt Securities, when first issued, will have no
established trading market. Any underwriters or agents to or through whom
Subordinated Debt Securities are sold by the Company for public offering and
sale may make a market in such Subordinated Debt Securities, but such
underwriters or agents will not be obligated to do so and may discontinue any
market making activities at any time without notice. No assurance can be given
as to the existence or the liquidity of any trading market for any Subordinated
Debt Securities.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other persons acting as the Company's agents to solicit offers
by certain institutions to purchase Subordinated Debt Securities from the
Company pursuant to contracts providing for payment and delivery on a future
date. Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by the Company. The obligations of any purchaser
under any such contract will be subject to the condition that the purchase of
the Subordinated Debt Securities shall not at the time of delivery be prohibited
under the laws of the jurisdiction to which such purchaser is subject. The
underwriters and such other agents will not have any responsibility in respect
of the validity or performance of such contracts.
Under agreements which may be entered into by the Company, underwriters and
agents who participate in the distribution of Subordinated Debt Securities may
be entitled to indemnification by the Company against certain liabilities,
including liabilities under the Act.
The specific terms and manner of sale of specific series of Subordinated
Debt Securities offered hereby are set forth or summarized in an accompanying
Prospectus Supplement.
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<PAGE> 26
LEGAL OPINIONS
The validity of the Subordinated Debt Securities offered hereby and certain
other legal matters will be passed upon for the Company by Raymond G. Smerge,
Vice President, Chief Legal Officer and Secretary of the Company. Certain legal
matters in connection with the Subordinated Debt Securities offered hereby will
be passed upon for the Company by Thompson & Knight, A Professional Corporation,
Dallas, Texas, special counsel for the Company.
EXPERTS
The consolidated balance sheets of Centex Corporation and its subsidiaries
as of March 31, 1995 and 1994, and the related consolidated statements of
earnings, stockholders' equity and cash flows for each of the three years in the
period ended March 31, 1995, included as an exhibit to the Joint Annual Report
on Form 10-K of the Company and 3333 Holding Corporation and Centex Development
Company, L.P. for the fiscal year ended March 31, 1995, and incorporated by
reference in this Prospectus, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are incorporated herein by reference in reliance upon the authority
of said firm as experts in accounting and auditing in giving said reports.
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<PAGE> 27
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NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS, AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES
OTHER THAN THE SECURITIES OFFERED BY THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY
SALE MADE THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS OR THAT THE INFORMATION CONTAINED HEREIN
OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PROSPECTUS SUPPLEMENT
PAGE
----
<S> <C>
Use of Proceeds....................... S-3
Capitalization........................ S-3
Ratings............................... S-4
Description of Debentures............. S-4
Underwriting.......................... S-6
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
The Company........................... 3
Use of Proceeds....................... 3
Ratio of Earnings to Fixed Charges.... 3
Summary of Selected Financial Data.... 4
Business.............................. 5
Description of Subordinated Debt
Securities.......................... 12
Plan of Distribution.................. 19
Legal Opinions........................ 20
Experts............................... 20
</TABLE>
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- ------------------------------------------------------
- ------------------------------------------------------
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$100,000,000
CENTEX CORPORATION
7 3/8% SUBORDINATED
DEBENTURES DUE JUNE 1, 2005
---------------------------
PROSPECTUS SUPPLEMENT
---------------------------
NATIONSBANC CAPITAL MARKETS, INC.
JUNE 5, 1995
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- ------------------------------------------------------
