<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
JOINT QUARTERLY REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarter Ended
JUNE 30, 1997
Commission File No. 1-6776
CENTEX CORPORATION
A Nevada Corporation
IRS Employer Identification No. 75-0778259
2728 N. Harwood
Dallas, Texas 75201
(214) 981-5000
Commission File Nos. 1-9624 and 1-9625, respectively
3333 HOLDING CORPORATION
A Nevada Corporation
CENTEX DEVELOPMENT COMPANY, L.P.
A Delaware Limited Partnership
IRS Employer Identification Nos. 75-2178860 and 75-2168471, respectively
2728 N. Harwood
Dallas, Texas 75201
(214) 981-6700
The registrants have filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and
have been subject to such filing requirements for the past 90 days.
________________________________________________________________________________
As of the close of business on August 8, 1997, 29,595,654 shares of Centex
Corporation common stock were outstanding, 1,000 shares of common stock of 3333
Holding Corporation were outstanding, and 900 class B units of limited
partnership interest of Centex Development Company, L.P. were outstanding.
________________________________________________________________________________
<PAGE> 2
CENTEX CORPORATION
3333 HOLDING CORPORATION
CENTEX DEVELOPMENT COMPANY, L.P.
FORM 10-Q TABLE OF CONTENTS
JUNE 30, 1997
CENTEX CORPORATION
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. Condensed Consolidated Financial Statements 1
Condensed Consolidated Statement of Earnings
for the Three Months Ended June 30, 1997 2
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statement of Cash Flows
for the Three Months Ended June 30, 1997 4
Notes to Condensed Consolidated Financial Statements 5-8
ITEM 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition 9-13
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 15
</TABLE>
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<PAGE> 3
3333 HOLDING CORPORATION
CENTEX DEVELOPMENT COMPANY, L.P.
<TABLE>
PAGE
<S> <C> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. Condensed Combining Financial Statements 16
Condensed Combining Statement of Operations
for the Three Months Ended June 30, 1997 17
Condensed Combining Balance Sheets 18
Condensed Combining Statement of Cash Flows
for the Three Months Ended June 30, 1997 19
Notes to Condensed Combining Financial Statements 20
ITEM 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition 21
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K 22
SIGNATURES 23-24
</TABLE>
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<PAGE> 4
CENTEX CORPORATION
PART I. FINANCIAL INFORMATION
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
ITEM 1.
The condensed consolidated financial statements include the accounts
of Centex Corporation and subsidiaries ("Centex" or the "Company"), and have
been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the Company believes
that the disclosures are adequate to make the information presented not
misleading. It is suggested that these condensed consolidated financial
statements be read in conjunction with the consolidated financial statements
and the notes thereto included in the Company's latest annual report on Form
10-K. In the opinion of the Company, all adjustments necessary to present
fairly the information in the following condensed consolidated financial
statements of the Company have been included. The results of operations for
such interim periods are not necessarily indicative of the results for the full
year.
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<PAGE> 5
CENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(dollars in thousands, except per share data)
(unaudited)
<TABLE>
<S> <C>
For the Three Months Ended
June 30,
------------------------------------------
1997 1996
---------------- -----------------
REVENUES
Home Building
Housing $ 460,846 $ 529,821
Manufactured Housing 31,894 -
Investment Real Estate 6,780 1,375
Financial Services 47,243 37,931
Construction Products 77,954 61,058
Contracting and Construction Services 236,658 262,226
---------------- -----------------
861,375 892,411
---------------- -----------------
COSTS AND EXPENSES
Home Building
Housing 433,386 500,736
Manufactured Housing 29,678 -
Investment Real Estate (1,369) (2,448)
Financial Services 42,038 31,830
Construction Products 54,548 45,860
Contracting and Construction Services 235,647 261,723
Other, net 1,349 129
Corporate General and Administrative 4,360 4,049
Interest Expense 7,806 9,582
Minority Interest 11,513 7,599
---------------- -----------------
818,956 859,060
---------------- -----------------
EARNINGS BEFORE INCOME TAXES 42,419 33,351
Income Taxes 15,409 11,532
---------------- -----------------
NET EARNINGS $ 27,010 $ 21,819
================ =================
EARNINGS PER SHARE $ 0.90 $ 0.75
================ =================
AVERAGE SHARES OUTSTANDING 29,865,876 29,191,955
================ =================
CASH DIVIDENDS PER SHARE $ 0.05 $ 0.05
================ =================
</TABLE>
See notes to condensed consolidated financial statements.
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<PAGE> 6
CENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
<TABLE>
<CAPTION>
Centex Corporation and
Subsidiaries Centex Corporation Financial Services
--------------------------- --------------------------- ------------------------
June 30, March 31, June 30, March 31, June 30, March 31,
1997* 1997** 1997* 1997** 1997* 1997**
---------- ----------- ----------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and Cash Equivalents $ 42,202 $ 31,320 $ 30,132 $ 21,679 $ 12,070 $ 9,641
Receivables -
Residential Mortgage Loans 682,617 632,657 - - 682,617 632,657
Other 359,317 354,728 331,781 331,091 27,536 23,637
Affiliates - - - - 6,604 (19,985)
Inventories 1,086,299 1,001,759 1,086,299 1,001,759 - -
Investments -
Centex Development Company, L.P. 30,749 32,664 30,749 32,664 - -
Joint Ventures and Other 7,043 5,277 7,043 5,277 - -
Unconsolidated Subsidiaries - - 41,811 68,171 - -
Property and Equipment, net 297,544 293,143 280,203 276,627 17,341 16,516
Other Assets -
Deferred Income Taxes 191,560 197,413 192,869 195,983 (1,309) 1,430
Goodwill, net 108,508 103,622 96,583 91,442 11,925 12,180
Deferred Charges and Other 30,987 26,246 21,347 18,233 9,640 8,013
---------- ----------- ----------- ----------- ---------- ---------
$2,836,826 $ 2,678,829 $ 2,118,817 $ 2,042,926 $ 766,424 $ 684,089
========== =========== =========== =========== ========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable and
Accrued Liabilities $ 679,016 $ 737,698 $ 624,614 $ 685,050 $ 54,402 $ 52,648
Short-term Debt 820,855 627,518 160,000 47,000 660,855 580,518
Long-term Debt 240,530 236,769 240,530 236,769 - -
Minority Stockholders' Interest 134,646 142,230 131,894 139,493 2,752 2,737
Negative Goodwill 94,837 98,837 94,837 98,837 - -
Stockholders' Equity -
Preferred Stock, Authorized
5,000,000 Shares, None Issued - - - - - -
Common Stock $.25 Par Value;
Authorized 50,000,000 Shares;
Issued and Outstanding
29,331,960 and 29,016,089
respectively 7,320 7,254 7,320 7,254 1 1
Capital in Excess of Par Value 24,337 18,789 24,337 18,789 44,075 44,075
Retained Earnings 835,285 809,734 835,285 809,734 4,339 4,110
---------- ----------- ----------- ----------- ---------- ---------
Total Stockholders' Equity 866,942 835,777 866,942 835,777 48,415 48,186
---------- ----------- ----------- ----------- ---------- ---------
$2,836,826 $ 2,678,829 $ 2,118,817 $ 2,042,926 $ 766,424 $ 684,089
========== =========== =========== =========== ========== =========
</TABLE>
See notes to condensed consolidated financial statements.
* Unaudited
** Condensed from audited financial statements.
In the supplemental data presented above, "Centex Corporation" represents the
adding together of all subsidiaries other than those included in Financial
Services (CTX Mortgage and Affiliates). Transactions between Centex Corporation
and Financial Services have been eliminated from the Centex Corporation and
Subsidiaries balance sheets.
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<PAGE> 7
CENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
June 30,
---------------------------------------
1997 1996
----------------- ----------------
<S> <C> <C>
CASH FLOWS - OPERATING ACTIVITIES
Net Earnings $ 27,010 $ 21,819
Adjustments -
Depreciation and Amortization 5,633 3,093
Deferred Income Taxes 8,574 8,644
Equity in Earnings of CDC and Joint Ventures (666) (503)
Minority Interests in Earnings of Subsidiaries 11,513 7,599
Increase in Receivables (4,589) (7,969)
(Increase) Decrease in Residential Mortgage Loans (49,960) 62,573
Increase in Inventories (84,540) (15,355)
Decrease in Payables and Accruals (58,682) (14,910)
Increase in Other Assets (14,128) (24,588)
Other, net (19,097) 9,071
----------------- ----------------
(178,932) 49,474
----------------- ----------------
CASH FLOWS - INVESTING ACTIVITIES
Decrease in Advances to CDC and Joint Ventures 815 2,069
(Increase) Decrease in Property and Equipment, net (12,254) 2,283
----------------- ----------------
(11,439) 4,352
----------------- ----------------
CASH FLOWS - FINANCING ACTIVITIES
Increase (Decrease) in Debt 197,098 (31,935)
Proceeds from Stock Option Exercises 5,614 1,558
Dividends Paid (1,459) (1,425)
----------------- ----------------
201,253 (31,802)
----------------- ----------------
NET INCREASE IN CASH 10,882 22,024
CASH AT BEGINNING OF PERIOD 31,320 14,042
----------------- ----------------
CASH AT END OF PERIOD $ 42,202 $ 36,066
================= ================
</TABLE>
See notes to condensed consolidated financial statements.
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<PAGE> 8
CENTEX CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1997
(unaudited)
(A) A summary of changes in stockholders' equity is presented below:
<TABLE>
<CAPTION>
Capital in
Preferred Common Excess of Retained
Stock Stock Par Value Earnings Total
----------- ---------- ----------- ------------ ------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C>
Balance, March 31, 1997 $ - $ 7,254 $ 18,789 $ 809,734 $ 835,777
Net Earnings - - - 27,010 27,010
Exercise of Stock Options - 66 5,548 - 5,614
Cash Dividends - - - (1,459) (1,459)
----------- ---------- ----------- ------------ ------------
BALANCE, JUNE 30, 1997 $ - $ 7,320 $ 24,337 $ 835,285 $ 866,942
=========== ========== =========== ============ ============
</TABLE>
(B) On November 30, 1987 the Company distributed to a nominee, all of the
issued and outstanding shares of common stock of 3333 Holding Corporation
and warrants to purchase approximately 80% of the Class B units of limited
partnership interest in Centex Development Company, L. P. A wholly-owned
subsidiary of 3333 Holding Corporation serves as general partner of Centex
Development Company, L. P. These securities are held by the nominee on
behalf of Centex stockholders, and will trade in tandem with the common
stock of Centex, until such time as they are detached. Supplementary
condensed combined financial statements for Centex, 3333 Holding
Corporation and Subsidiary and Centex Development Company, L. P. are as
follows:
-5-
<PAGE> 9
NOTES - continued
CENTEX CORPORATION, 3333 HOLDING CORPORATION AND SUBSIDIARY
AND CENTEX DEVELOPMENT COMPANY, L. P.
SUPPLEMENTARY CONDENSED COMBINED BALANCE SHEETS
(dollars in thousands)
<TABLE>
<CAPTION>
June 30, March 31,
1997 1997 *
---------------- ----------------
<S> <C> <C>
ASSETS
Cash and Cash Equivalents $ 43,485 $ 31,950
Receivables 1,043,770 989,886
Inventories 1,124,293 1,041,855
Investments - Joint Ventures and Other 7,226 5,479
Property and Equipment, net 297,544 293,143
Other Assets 331,165 327,281
---------------- ----------------
$ 2,847,483 $ 2,689,594
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable and Accrued Liabilities $ 681,903 $ 740,230
Short-term Debt 827,355 634,573
Long-term Debt 240,530 236,769
Minority Stockholders' Interest 134,646 142,230
Negative Goodwill 94,837 98,837
Stockholders' Equity 868,212 836,955
---------------- ----------------
$ 2,847,483 $ 2,689,594
================ ================
</TABLE>
*Condensed from audited financial statements.
SUPPLEMENTARY CONDENSED COMBINED STATEMENT OF EARNINGS
(dollars in thousands)
<TABLE>
<CAPTION>
For the Three Months Ended
June 30,
-----------------------------------------
1997 1996
---------------- ----------------
<S> <C> <C>
Revenues $ 864,183 $ 892,583
Costs and Expenses 821,672 859,052
---------------- ----------------
Earnings Before Income Taxes 42,511 33,531
Income Taxes 15,409 11,532
---------------- ----------------
NET EARNINGS $ 27,102 $ 21,999
================ ================
</TABLE>
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<PAGE> 10
Notes - continued
(C) In order to assure the future availability of land for its Home Building
operation, the Company has made deposits totaling $17 million as of June
30, 1997 for options to purchase undeveloped land and developed lots
having a total purchase price of approximately $387 million. These
options and commitments expire at various dates to the year 2003. The
Company has also committed to purchase land and developed lots totaling
approximately $18 million. In addition, the Company has executed lot
purchase contracts with CDC which aggregate approximately $9 million.
(D) Interest expense relating to the financial services operations is
included in its costs and expenses. Interest related to non-financial
services is included as interest expense.
<TABLE>
<CAPTION>
Three Months Ended
---------------------------
6/30/97 6/30/96
------- -------
<S> <C> <C>
Total Interest Incurred $17,004 $17,816
Less - Financial Services (9,198) (8,234)
------- -------
Interest Expense $ 7,806 $ 9,582
======= =======
</TABLE>
(E) During the quarter ended June 30, 1994, Centex Construction Products,
Inc. (CXP) completed an initial public offering of 51% of its stock and
began trading on the New York Stock Exchange under the symbol "CXP". As
a result of CXP's repurchase of its own stock during the quarter ended
June 30, 1996, Centex's ownership interest in CXP has increased to more
than 50% (54.4% as of June 30, 1997). Accordingly, beginning with the
quarter ended June 30, 1996, CXP's financial results have been
consolidated with those of Centex.
(F) During the quarter ended June 30, 1996, Centex's Home Building subsidiary
completed a business combination transaction and reorganization with
Vista Properties, Inc. that increased Centex's ownership of Vista's
common stock from approximately 53% to 99.975%. Under the terms of the
combination transaction, Centex's Home Building assets and operations
were contributed to Vista in exchange for 12.4 million shares of Vista's
common stock and Vista changed its name to Centex Real Estate
Corporation.
As a result of the combination, Centex's Investment Real Estate
portfolio, valued in excess of $125 million, was reduced to a nominal
"book basis" after recording certain Vista-related tax benefits.
Accordingly, as these properties are developed or sold, the net sales
proceeds will be reflected as operating margin. "Negative Goodwill"
recorded as a result of the business combination is being amortized to
earnings over approximately seven years which represents the estimated
period over which the land will be developed and/or sold.
All investment property operations are being reported through Centex's
"Investment Real Estate" business segment which operates under the Vista
Properties Company name.
-7-
<PAGE> 11
Notes - continued
(G) During March, 1997, Centex Real Estate Corporation acquired 78% of Cavco
Industries, Inc.'s (Cavco) outstanding common stock at $26.75 per share
for a total of $74.3 million. Prior to the acquisition, Cavco's common
stock was publicly traded on the NASDAQ National Market. Goodwill of
$68.7 million was recorded in connection with the acquisition
(approximately $53.6 million relates to the 78% acquired by Centex) and
is being amortized to earnings over 30 years.
Cavco's operations are being reported through the "Manufactured Housing"
segment within the Home Building line of business.
(H) In March 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings Per Share" (SFAS
No. 128). This Statement establishes new standards for computing and
presenting earnings per share (EPS). SFAS No. 128 replaces the
presentation of primary EPS previously prescribed by Accounting
Principles Board Opinion No. 15 (APB No. 15) with a presentation of basic
EPS which is computed by dividing income available to common stockholders
by the weighted-average number of common shares outstanding for the
period.
SFAS No. 128 also requires dual presentation of basic and diluted EPS.
Diluted EPS is computed similarly to fully diluted EPS pursuant to APB
No. 15. Proforma basic and diluted EPS for the three months ended June
30, 1997 and 1996, assuming that SFAS No. 128 was effective as of the
beginning of the year are presented below.
<TABLE>
<CAPTION>
Three Months Ended
June 30,
--------------------
1997 1996
----- -----
<S> <C> <C>
Earnings per common share:
Basic $0.93 $0.77
Diluted $0.90 $0.74
</TABLE>
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<PAGE> 12
CENTEX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
Centex's consolidated revenues for the quarter were $861.4 million, 3%
less than $892.4 million for the same quarter last year. Earnings before
income taxes were $42.4 million, 27% higher than $33.4 million last year. Net
earnings were $27.0 million and earnings per share were $.90 for this quarter
compared to $21.8 million and $.75, respectively, for the same quarter last
year.
HOME BUILDING
Housing
The following summarizes Housing results for the quarter ended June 30,
1997 compared to the quarter ended June 30, 1996 (dollars in millions, except
per unit data):
<TABLE>
<CAPTION>
Quarter Ended Quarter Ended
6/30/97 6/30/96
--------------------------- -------------------------
<S> <C> <C> <C> <C>
Housing Revenues $ 460.8 100.0% $ 529.8 100.0%
Cost of Sales (368.4) (79.9%) (432.3) (81.6%)
Selling, General & Administrative (64.9) (14.1%) (68.4) (12.9%)
----------- ----- ----------- -----
Operating Earnings $ 27.5 6.0% $ 29.1 5.5%
=========== ===== =========== =====
Units Closed 2,566 3,095
Unit Sales Price $ 177,469 $ 167,374
% Change 6.0% 4.5%
Operating Earnings per Unit $ 10,701 $ 9,397
% Change 13.9% 34.5%
</TABLE>
The 14% improvement in the per unit operating margin for the quarter
ended June 30, 1997 despite the decline in closings reflects the Company's
continuing concentration on improved operating efficiencies.
Home closings for the quarter declined to 2,566 units, a 17% decrease
over 3,095 units for the same quarter last year. Home sales (orders) declined
to 3,099 for the quarter this year, 2% less than 3,153 units for the same
quarter a year ago. The backlog of homes sold but not closed at June 30, 1997
was 4,841 units, 13% less than the June 30, 1996 backlog, but 12% higher than
the backlog at March 31, 1997.
-9-
<PAGE> 13
Manufactured Housing
The following summarizes Manufactured Housing's results for the quarter
ended June 30, 1997 (dollars in millions):
<TABLE>
<CAPTION>
Quarter Ended
6/30/97
---------------------
<S> <C> <C>
Manufactured Housing Revenues $ 31,894 100.0%
Cost of Sales (26,352) (82.6%)
Selling, General & Administrative (2,753) (8.7%)
-------- -----
Earnings before Goodwill and
Minority Interest 2,789 8.7%
Goodwill Amortization (573) =====
--------
Earnings before Minority Interest 2,216
Minority Interest Expense (488)
--------
Operating Earnings $ 1,728
========
Units Produced 1,218
========
</TABLE>
The Manufactured Housing operation was acquired in late March, 1997.
Accordingly, there is no comparative data for the quarter ended June 30, 1996.
INVESTMENT REAL ESTATE
For the quarter ended June 30, 1997, Centex's Investment Real Estate
operation, through which all investment property transactions are reported, had
operating earnings of $8.1 million versus $3.8 million for the same quarter a
year ago. The gain for the current quarter was primarily due to increased land
sales.
-10-
<PAGE> 14
FINANCIAL SERVICES
The following summarizes Financial Services' results for the quarter
ended June 30, 1997 compared to the quarter ended June 30, 1996 (dollars in
millions):
<TABLE>
<CAPTION>
Quarter Ended Quarter Ended
6/30/97 6/30/96
--------- -----------
<S> <C> <C>
Revenues $ 47.2 $ 37.9
Operating Earnings $ 5.2 $ 6.1
Origination Volume $ 1,432 $ 1,403
Number of Loans Originated
Centex-built Homes ("Builder") 1,772 2,344
Non-Centex-built Homes ("Retail") 9,480 9,499
Home Equity 849 225
--------- -----------
12,101 12,068
========= ===========
</TABLE>
Builder applications of 2,405 were the same as last year while Retail
applications increased 6% to 10,177. The profit per loan for this year's
quarter was $493, 19% less than the per loan profit for the same quarter a year
ago.
Centex Home Equity Corporation (CHEC) applications of 1,177 increased 44%
from applications for the same quarter a year ago. CHEC should become
profitable in the latter part of fiscal 1998.
CONSTRUCTION PRODUCTS
CXP's operating earnings, net of minority interest, were $12.3 million
for the quarter this year, 61% higher than last year's earnings. Revenues from
CXP were $78.0 million for the quarter this year, 28% higher than last year.
CXP's record earnings resulted from a strong increase in Gypsum Wallboard
operating earnings due to significantly higher pricing and increased volumes
related to CXP's acquisition of the Eagle Gypsum wallboard plant in late fiscal
1997. Results from CXP's Cement operation also improved.
-11-
<PAGE> 15
CONTRACTING AND CONSTRUCTION SERVICES
The following summarizes Contracting and Construction Services results
for the quarter ended June 30, 1997 compared to the quarter ended June 30, 1996
(dollars in millions):
<TABLE>
<CAPTION>
Quarter Ended Quarter Ended
6/30/97 6/30/96
----------- ------------
<S> <C> <C>
Revenues $ 236.7 $ 262.2
Operating Earnings $ 1.0 $ .5
New Contracts Received $ 188 $ 277
Backlog of Uncompleted Contracts $ 1,066 $ 1,217
</TABLE>
The construction sector is improving as the economy strengthens and
profit margins on contracts recently acquired by the group continue to improve.
The Contracting and Construction Services operation provided a positive average
net cash flow in excess of Centex's investment in the group of approximately
$58 million during both the current quarter and the same quarter last year.
FINANCIAL CONDITION AND LIQUIDITY
Centex fulfills its short-term financing requirements with cash generated
from its operations and funds available under its credit facilities. These
credit facilities also serve as back-up lines for overnight borrowings under
its uncommitted bank facilities and commercial paper program. In addition, CTX
Mortgage Company has its own $600 million of committed credit facilities and
$485 million of uncommitted facilities to finance mortgages which are held
during the period they are being securitized and readied for delivery against
forward sale commitments.
The $197.1 million increase in debt was primarily used to fund the
increase in both residential mortgage loans and inventories and to reduce
payables and accruals. The increase in residential mortgage loans was
primarily due to the increase in the Company's new home equity lending
business.
The Company believes it has adequate resources and sufficient credit
facilities to satisfy its current needs and provide for future growth.
-12-
<PAGE> 16
OTHER DEVELOPMENTS AND OUTLOOK
Due to the Company's excellent financial performance, it increased
its dividend by 40% to $.28 annually or $.07 per quarter from $.20 annually or
$.05 per quarter beginning with the dividend payable in October, 1997.
Recent lower interest rates have favorably impacted home sales and
mortgage applications. If interest rates remain at or near current levels, the
Company's Home Building sales and margins should continue to increase and
fiscal 1998 Home Building results could surpass 1997's record levels. Centex
also expects improved performances from its other businesses, including
Financial Services and Manufactured Housing, as well as positive results from
Contracting and Construction Services.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
The information contained in this report includes forward looking
statements involving a number of risks and uncertainties. In addition to the
factors discussed, other determinants that could cause actual results to differ
include: increases in interest rates; business conditions; growth in the home
building, financial services, contracting and construction services, and
construction products industries and the economy in general; competitive
factors; and the cost of building materials. These and other factors are
described in the Joint Annual Report on Form 10-K of Centex Corporation and
3333 Holding Corporation and Centex Development Company, L.P., and in the
Annual Report on Form 10-K for Centex Construction Products, Inc., for the
fiscal year ended March 31, 1997. Both reports are filed with the Securities
and Exchange Commission.
-13-
<PAGE> 17
CENTEX CORPORATION
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
The Registrant filed no reports on Form 8-K during the
quarter ended June 30, 1997.
All other items required under Part II are omitted because they are not
applicable.
-14-
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
CENTEX CORPORATION
----------------------------------------
Registrant
August 12, 1997 /s/ JOHN T. EGELAND
----------------------------------------
John T. Egeland
Executive Vice President and
Chief Financial Officer
(principal financial officer)
August 12, 1997 /s/ BARRY G. WILSON
----------------------------------------
Barry G. Wilson
Controller
(chief accounting officer)
-15-
<PAGE> 19
3333 HOLDING CORPORATION
CENTEX DEVELOPMENT COMPANY, L.P.
PART I. FINANCIAL INFORMATION
CONDENSED COMBINING FINANCIAL STATEMENTS
ITEM 1.
The condensed combining financial statements include the accounts of 3333
Holding Corporation and subsidiary and Centex Development Company, L.P.
(collectively the "Companies"), and have been prepared by the Companies,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations, although the Companies believe that the disclosures are adequate
to make the information presented not misleading. It is suggested that these
condensed combining financial statements be read in conjunction with the
financial statements and the notes thereto included in the Companies' latest
annual report on Form 10-K. In the opinion of the Companies, all adjustments
necessary to present fairly the information in the following condensed
financial statements of the Companies have been included. The results of
operations for such interim periods are not necessarily indicative of the
results for the full year.
-16-
<PAGE> 20
3333 HOLDING CORPORATION AND SUBSIDIARY
AND CENTEX DEVELOPMENT COMPANY, L.P.
CONDENSED COMBINING STATEMENT OF OPERATIONS
(dollars in thousands, except per share/unit data)
(unaudited)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED JUNE 30,
------------------------------------------------------------------------------------------
1997 1996
------------------------------------------ ------------------------------------------
3333 HOLDING 3333 HOLDING
CENTEX CORPORATION CENTEX CORPORATION
DEVELOPMENT AND DEVELOPMENT AND
COMBINED COMPANY, L.P. SUBSIDIARY COMBINED COMPANY, L.P. SUBSIDIARY
------------ ------------- ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Revenues $3,741 $3,623 $412 $3,472 $3,322 $ 579
Costs and Expenses 2,950 2,924 320 3,116 3,146 399
------ ------ ---- ------ ------ -----
Earnings Before Income Taxes 791 699 92 356 176 180
Income Taxes - - - - - -
------ ------ ---- ------ ------ -----
Net Earnings $ 791 $ 699 $ 92 $ 356 $ 176 $ 180
====== ====== ==== ====== ====== =====
Earnings Per Share/Unit
(Average Outstanding Shares,
1,000; Units, 1,000) $ 699 $ 92 $ 176 $ 180
====== ==== ====== =====
</TABLE>
See notes to condensed combining financial statements.
-17-
<PAGE> 21
3333 HOLDING CORPORATION AND SUBSIDIARY
AND CENTEX DEVELOPMENT COMPANY, L.P.
CONDENSED COMBINING BALANCE SHEETS
(dollars in thousands)
<TABLE>
<CAPTION>
JUNE 30, 1997* MARCH 31, 1997**
------------------------------------ -----------------------------------
3333 HOLDING CENTEX 333 HOLDING
CENTEX CORPORATION DEVELOPMENT CORPORATION
DEVELOPMENT AND COMPANY AND
COMBINED COMPANY, L.P. SUBSIDIARY COMBINED L.P. SUBSIDIARY
-------- ------------- ----------- -------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash $ 1,283 $ 1,277 $ 6 $ 630 $ 625 $ 5
Accounts Receivable 318 540 182 312 868 176
Notes Receivable -
Centex Corporation and Subsidiaries 7,700 - 7,700 7,700 - 7,700
Other 1,700 1,700 - 2,365 2,365 -
Investment in Affiliate - - 767 - - 767
Investment in Real Estate Joint Venture 183 183 - 202 202 -
Projects Held for Development and Sale 36,723 36,723 - 38,918 38,918 -
Other Assets 110 110 - - - -
------- ------- ------- ------- ------- ------
$48,017 $40,533 $ 8,655 $50,127 $42,978 $8,648
======= ======= ======= ======= ======= ======
LIABILITIES, STOCKHOLDERS' EQUITY AND PARTNERS' CAPITAL
Accounts Payable and Accrued
Liabilities $ 2,987 $ 2,821 $ 570 $ 2,648 $ 2,410 $ 970
Notes Payable -
Centex Corporation and Subsidiaries 7,315 - 7,315 7,000 - 7,000
Other 6,500 6,500 - 7,055 7,055 -
Land Sale Deposits 10 10 - 10 10 -
------- ------- ------- ------- ------- ------
Total Liabilities 16,812 9,331 7,885 16,713 9,475 7,970
Stockholders' Equity and
Partners' Capital 31,205 31,202 770 33,414 33,503 678
------- ------- ------- ------- ------- ------
$48,017 $40,533 $ 8,655 $50,127 $42,978 $8,648
======= ======= ======= ======= ======= ======
</TABLE>
* Unaudited
** Condensed from audited financial statements.
See notes to condensed combining financial statements.
-18-
<PAGE> 22
3333 HOLDING CORPORATION AND SUBSIDIARY
AND CENTEX DEVELOPMENT COMPANY, L.P.
CONDENSED COMBINING STATEMENT OF CASH FLOWS
(dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED JUNE 30,
-------------------------------------------------------------------------------------
1997 1996
------------------------------------------- --------------------------------------
3333 HOLDING 3333 HOLDING
CENTEX CORPORATION CENTEX CORPORATION
DEVELOPMENT AND DEVELOPMENT AND
COMBINED COMPANY, L.P. SUBSIDIARY COMBINED COMPANY, L.P. SUBSIDIARY
-------- ------------- ------------ -------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Cash Flows - Operating Activities
Net Earnings $ 791 $ 699 $ 92 $ 356 $ 176 $ 180
Net Change in Payables, Accruals,
Deposits and Receivables 333 739 (406) 394 (523) 917
Decrease in Notes Receivable 665 665 - 1,028 1,028 -
Decrease (Increase) in Advances to
Joint Venture 19 19 - (37) (37) -
Decrease in Projects Held for
Development and Sale 2,195 2,195 - 2,554 2,554 -
Increase in Other Assets (110) (110) - - - -
------- ------- ------- ------- ------- -------
3,893 4,207 (314) 4,295 3,198 1,097
------- ------- ------- ------- ------- -------
Cash Flows - Financing Activities
Increase (Decrease) in Notes Payable -
Centex Corporation and Subsidiaries 315 - 315 (1,100) - (1,100)
Other (555) (555) - (1,373) (1,373) -
Capital Distributions (3,000) (3,000) - (1,500) (1,500) -
------- ------- ------- ------- ------- -------
(3,240) (3,555) 315 (3,973) (2,873) (1,100)
------- ------- ------- ------- ------- -------
Net Increase (Decrease) In Cash 653 652 1 322 325 (3)
Cash At Beginning Of Year 630 625 5 231 225 6
------- ------- ------- ------- ------- -------
Cash At End Of Period $ 1,283 $ 1,277 $ 6 $ 553 $ 550 $ 3
======= ======= ======= ======= ======= =======
</TABLE>
See notes to condensed combining financial statements.
-19-
<PAGE> 23
3333 HOLDING CORPORATION AND SUBSIDIARY
AND CENTEX DEVELOPMENT COMPANY, L.P.
NOTES TO CONDENSED COMBINING FINANCIAL STATEMENTS
JUNE 30, 1997
(unaudited)
(A) On November 30, 1987 Centex Corporation ("Centex") distributed to a
nominee all of the issued and outstanding shares of common stock of
3333 Holding Corporation ("Holding") and warrants to purchase
approximately 80% of the Class B units of limited partnership interest
in Centex Development Company, L.P. (the "Partnership"). 3333
Development Corporation ("Development"), a wholly-owned subsidiary of
Holding, serves as general partner of the Partnership. These
securities are held by the nominee on behalf of Centex stockholders
and will trade in tandem with the common stock of Centex until such
time as they are detached.
(B) See Note B to the condensed consolidated financial statements of
Centex Corporation and subsidiaries included elsewhere in this Form
10-Q for supplementary condensed combined financial statements for
Centex Corporation and subsidiaries, Holding and subsidiary and the
Partnership.
(C) The Partnership sells lots to Centex Homes pursuant to certain
purchase and sale agreements. Revenues from these sales totaled
$594,000 and $2,908,000 for the three months ended June 30, 1997 and
1996, respectively. Additionally, during the three months ended June
30, 1997, the Partnership sold property located in Carrollton, Texas
to Centex Homes for $2,866,000.
(D) A summary of changes in stockholders' equity is presented below
(dollars in thousands).
<TABLE>
<CAPTION>
For the Three Months Ended June 30, 1997
-------------------------------------------------------------------------------
3333 Holding Corporation
Centex Development Company, L.P. and Subsidiary
--------------------------------- -------------------------------
CLASS B GENERAL LIMITED CAPITAL IN
UNITS PARTNERS' PARTNERS' STOCK EXCESS OF RETAINED
COMBINED WARRANTS CAPITAL CAPITAL WARRANTS PAR VALUE EARNINGS
-------- ------- --------- --------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balance at March 31, 1997 $ 33,414 $ 500 $ 767 $ 32,236 $ 1 $ 800 $ (123)
Capital Distributions (3,000) - - (3,000) - - -
Net Earnings 791 - - 699 - - 92
-------- ------- --------- --------- -------- ---------- ---------
BALANCE AT JUNE 30, 1997 $ 31,205 $ 500 $ 767 $ 29,935 $ 1 $ 800 $ (31)
======== ======= ========= ========= ========= ========== =========
</TABLE>
The Partnership agreement provides that Class A limited partners are entitled
to a cumulative preferred return of 9% per annum on their unrecovered capital.
Unrecovered capital represents initial capital contributions as reduced by
repayments and is the basis for preference accruals.
During the three months ended June 30, 1997, the Partnership made preference
payments totaling $3.0 million to its limited partners, which are Centex
affiliates. Preference payments in arrears at June 30, 1997 amounted to $3.6
million and unrecovered capital totaled $32.8 million.
-20-
<PAGE> 24
3333 HOLDING CORPORATION AND SUBSIDIARY
AND CENTEX DEVELOPMENT COMPANY, L.P.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
On a combined basis, revenues for the quarter ended June 30, 1997 of
$3.7 million included results from the sale of residential property in Florida
and commercial property in Texas. Revenues of $3.5 million for the quarter
ended June 30, 1996 included the sale of residential property in Illinois and
New Jersey. The quarter ended June 30, 1997 reflected combined net earnings of
$791,000, compared to $356,000 for the same quarter last year. The improvement
in earnings relates to the higher gross margin on real estate sales for the
quarter ended June 30, 1997 compared to the same quarter last year.
LIQUIDITY AND CAPITAL RESOURCES
Cash generated from sales and the principal collection on notes
receivable during the three months ended June 30, 1997 was sufficient to allow
for the Partnership to make preference payments totalling $3.0 million to its
limited partners, which are Centex affiliates.
Holding, Development and the Partnership believe that they will be
able to provide or obtain the necessary funding for their current operations
and future expansion needs. The revenues, earnings and liquidity of these
companies are largely dependent on future land sales, the timing of which is
uncertain. The ability to obtain external debt or equity capital is subject to
the provisions of Holding's loan agreement with Centex and the Partnership
Agreement governing the Partnership.
-21-
<PAGE> 25
3333 HOLDING CORPORATION
CENTEX DEVELOPMENT COMPANY, L.P.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27.1 - Financial Data Schedule
Exhibit 27.2 - Financial Data Schedule
(b) Reports on Form 8-K
The Registrant filed no reports on Form 8-K during the
quarter ended June 30, 1997.
All other items required under Part II are omitted because they are not
applicable.
-22-
<PAGE> 26
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
3333 HOLDING CORPORATION
----------------------------------------
Registrant
August 12, 1997 /s/ J. STEPHEN BILHEIMER
----------------------------------------
J. Stephen Bilheimer
President
August 12, 1997 /s/ KIMBERLY PINSON
----------------------------------------
Kimberly Pinson
Vice President and Treasurer
(chief accounting officer)
-23-
<PAGE> 27
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CENTEX DEVELOPMENT COMPANY, L.P.
----------------------------------------
Registrant
By: 3333 Development Corporation,
General Partner
August 12, 1997 /s/ J. STEPHEN BILHEIMER
----------------------------------------
J. Stephen Bilheimer
President
August 12, 1997 /s/ KIMBERLY PINSON
----------------------------------------
Kimberly Pinson
Vice President and Treasurer
(chief accounting officer)
-24-
<PAGE> 28
Index to Exhibits
<TABLE>
<CAPTION>
Exhibit No Description
- ---------- -----------
<S> <C>
Exhibit 27 Financial Data Schedule
Exhibit 27.1 Financial Data Schedule
Exhibit 27.2 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CENTEX
CORPORATION'S JUNE 30, 1997, FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000018532
<NAME> CENTEX CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 42,202
<SECURITIES> 0
<RECEIVABLES> 1,041,934
<ALLOWANCES> 0
<INVENTORY> 1,086,299
<CURRENT-ASSETS> 0
<PP&E> 502,021
<DEPRECIATION> 204,477
<TOTAL-ASSETS> 2,836,826
<CURRENT-LIABILITIES> 0
<BONDS> 240,530
0
0
<COMMON> 7,320
<OTHER-SE> 859,622
<TOTAL-LIABILITY-AND-EQUITY> 2,836,826
<SALES> 861,375
<TOTAL-REVENUES> 861,375
<CGS> 795,277
<TOTAL-COSTS> 795,277
<OTHER-EXPENSES> 15,873
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,806
<INCOME-PRETAX> 42,419
<INCOME-TAX> 15,409
<INCOME-CONTINUING> 27,010
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27,010
<EPS-PRIMARY> 0.90
<EPS-DILUTED> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 3333 HOLDING
CORPORATION'S JUNE 30, 1997, FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000818762
<NAME> 3333 HOLDING CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 6
<SECURITIES> 0
<RECEIVABLES> 7,882
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 8,655
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 1
<OTHER-SE> 769
<TOTAL-LIABILITY-AND-EQUITY> 8,655
<SALES> 412
<TOTAL-REVENUES> 412
<CGS> 320
<TOTAL-COSTS> 320
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 92
<INCOME-TAX> 0
<INCOME-CONTINUING> 92
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 92
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CENTEX
DEVELOPMENT COMPANY L.P.'S JUNE 30, 1997, FORM 10-Q AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000818764
<NAME> CENTEX DEVELOPMENT COMPANY, L.P.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,277
<SECURITIES> 0
<RECEIVABLES> 2,240
<ALLOWANCES> 0
<INVENTORY> 36,723
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 40,533
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 500
<OTHER-SE> 30,702
<TOTAL-LIABILITY-AND-EQUITY> 40,533
<SALES> 3,623
<TOTAL-REVENUES> 3,623
<CGS> 2,924
<TOTAL-COSTS> 2,924
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 699
<INCOME-TAX> 0
<INCOME-CONTINUING> 699
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 699
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
