<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
DECEMBER 31, 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 February 9, 1998, 29,736,039 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
DECEMBER 31, 1997
CENTEX CORPORATION
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. Condensed Consolidated Financial Statements 1
Condensed Consolidated Statement of Earnings
for the Three Months Ended December 31, 1997 2
Condensed Consolidated Statement of Earnings
for the Nine Months Ended December 31, 1997 3
Condensed Consolidated Balance Sheets 4
Condensed Consolidated Statement of Cash Flows
for the Nine Months Ended December 31, 1997 5
Notes to Condensed Consolidated Financial Statements 6-10
ITEM 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition 11-15
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K 16
SIGNATURES 17
</TABLE>
-i-
<PAGE> 3
3333 HOLDING CORPORATION
CENTEX DEVELOPMENT COMPANY, L.P.
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. Condensed Combining Financial Statements 19
Condensed Combining Statement of Operations
for the Three Months Ended December 31, 1997 20
Condensed Consolidated Statement of Operations
for the Nine Months Ended December 31, 1997 21
Condensed Combining Balance Sheets 22
Condensed Combining Statement of Cash Flows
for the Nine Months Ended December 31, 1997 23
Notes to Condensed Combining Financial Statements 24
ITEM 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition 25
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K 26
SIGNATURES 27-28
</TABLE>
-ii-
<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.
-1-
<PAGE> 5
CENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(dollars in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
December 31,
-----------------------------
1997 1996
------------ ------------
<S> <C> <C>
REVENUES
Home Building
Conventional Housing $ 557,484 $ 566,691
Manufactured Housing 38,239 --
Investment Real Estate 6,088 4,771
Financial Services 64,604 38,190
Construction Products 70,510 59,117
Contracting and Construction Services 246,158 270,338
------------ ------------
983,083 939,107
------------ ------------
COSTS AND EXPENSES
Home Building
Conventional Housing 515,194 529,834
Manufactured Housing 34,768 --
Investment Real Estate (986) (787)
Financial Services 56,097 30,990
Construction Products 49,811 41,826
Contracting and Construction Services 243,652 273,387
Other, net 2,025 654
Corporate General and Administrative 5,014 4,285
Interest Expense 8,293 7,969
Minority Interest 10,292 8,455
------------ ------------
924,160 896,613
------------ ------------
EARNINGS BEFORE INCOME TAXES 58,923 42,494
Income Taxes 21,543 15,031
------------ ------------
NET EARNINGS $ 37,380 $ 27,463
============ ============
EARNINGS PER SHARE
Basic $ 1.26 $ 0.96
============ ============
Diluted $ 1.21 $ 0.93
============ ============
AVERAGE SHARES OUTSTANDING
Basic 29,683,411 28,670,420
============ ============
Diluted 30,879,736 29,670,683
============ ============
CASH DIVIDENDS PER SHARE $ 0.07 $ 0.05
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
-2-
<PAGE> 6
CENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(dollars in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
For the Nine Months Ended
December 31,
------------------------------
1997 1996
------------ ------------
<S> <C> <C>
REVENUES
Home Building
Conventional Housing $ 1,605,169 $ 1,704,181
Manufactured Housing 103,727 --
Investment Real Estate 18,199 6,781
Financial Services 169,141 117,113
Construction Products 231,876 185,713
Contracting and Construction Services 708,092 819,333
------------ ------------
2,836,204 2,833,121
------------ ------------
COSTS AND EXPENSES
Home Building
Conventional Housing 1,493,910 1,600,161
Manufactured Housing 95,200 --
Investment Real Estate (3,643) (6,007)
Financial Services 147,866 97,676
Construction Products 160,066 133,172
Contracting and Construction Services 703,384 822,019
Other, net 4,945 1,516
Corporate General and Administrative 14,278 12,760
Interest Expense 24,818 26,760
Minority Interest 35,343 25,900
------------ ------------
2,676,167 2,713,957
------------ ------------
EARNINGS BEFORE INCOME TAXES 160,037 119,164
Income Taxes 59,256 41,642
------------ ------------
NET EARNINGS $ 100,781 $ 77,522
============ ============
EARNINGS PER SHARE
Basic $ 3.42 $ 2.72
============ ============
Diluted $ 3.30 $ 2.63
============ ============
AVERAGE SHARES OUTSTANDING
Basic 29,427,192 28,549,797
============ ============
Diluted 30,524,196 29,518,786
============ ============
CASH DIVIDENDS PER SHARE $ 0.19 $ 0.15
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
-3-
<PAGE> 7
CENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
<TABLE>
<CAPTION>
Centex Corporation and
Subsidiaries Centex Corporation
------------------------------- -------------------------------
December 31, March 31, December 31, March 31,
1997* 1997** 1997* 1997**
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
Cash and Cash Equivalents $ 89,499 $ 31,320 $ 74,709 $ 21,679
Receivables -
Residential Mortgage Loans 825,200 632,657 -- --
Other 347,203 354,728 311,685 331,091
Affiliates -- -- -- --
Inventories 1,152,879 1,001,759 1,152,879 1,001,759
Investments -
Centex Development Company, L.P. 28,596 32,664 28,596 32,664
Joint Ventures 5,743 5,277 5,743 5,277
Unconsolidated Subsidiaries -- -- 54,584 68,171
Property and Equipment, net 302,161 293,143 282,603 276,627
Other Assets -
Deferred Income Taxes 166,279 197,413 166,471 195,983
Goodwill, net 107,272 103,622 96,863 91,442
Deferred Charges and Other 34,327 26,246 22,968 18,233
------------ ------------ ------------ ------------
$ 3,059,159 $ 2,678,829 $ 2,197,101 $ 2,042,926
============ ============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable and Accrued Liabilities $ 703,092 $ 737,698 $ 644,064 $ 685,050
Short-term Debt 936,757 627,518 137,500 47,000
Long-term Debt 240,183 236,769 240,183 236,769
Minority Stockholders' Interest 144,889 142,230 141,116 139,493
Negative Goodwill 86,837 98,837 86,837 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
29,692,312 and 29,016,089 respectively 7,423 7,254 7,423 7,254
Capital in Excess of Par Value 35,075 18,789 35,075 18,789
Retained Earnings 904,903 809,734 904,903 809,734
------------ ------------ ------------ ------------
Total Stockholders' Equity 947,401 835,777 947,401 835,777
------------ ------------ ------------ ------------
$ 3,059,159 $ 2,678,829 $ 2,197,101 $ 2,042,926
============ ============ ============ ============
<CAPTION>
Financial Services
--------------------------------
December 31, March 31,
1997* 1997**
------------ ------------
<S> <C> <C>
ASSETS
Cash and Cash Equivalents $ 14,790 $ 9,641
Receivables -
Residential Mortgage Loans 825,200 632,657
Other 35,518 23,637
Affiliates (894) (19,985)
Inventories -- --
Investments -
Centex Development Company, L.P. -- --
Joint Ventures -- --
Unconsolidated Subsidiaries -- --
Property and Equipment, net 19,558 16,516
Other Assets -
Deferred Income Taxes (192) 1,430
Goodwill, net 10,409 12,180
Deferred Charges and Other 11,359 8,013
------------ ------------
$ 915,748 $ 684,089
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable and Accrued Liabilities $ 59,028 $ 52,648
Short-term Debt 799,257 580,518
Long-term Debt -- --
Minority Stockholders' Interest 3,773 2,737
Negative Goodwill -- --
Stockholders' Equity -
Preferred Stock, Authorized 5,000,000
Shares, None Issued -- --
Common Stock $.25 Par Value; Authorized
50,000,000 Shares; Issued and Outstanding
29,692,312 and 29,016,089 respectively 1 1
Capital in Excess of Par Value 46,444 44,075
Retained Earnings 7,245 4,110
------------ ------------
Total Stockholders' Equity 53,690 48,186
------------ ------------
$ 915,748 $ 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. Transactions between Centex Corporation and Financial Services have
been eliminated from the Centex Corporation and Subsidiaries balance sheets.
-4-
<PAGE> 8
CENTEX CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
For the Nine Months Ended
December 31,
-------------------------
1997 1996
--------- ---------
<S> <C> <C>
CASH FLOWS - OPERATING ACTIVITIES
Net Earnings $ 100,781 $ 77,522
Adjustments -
Depreciation and Amortization 18,265 9,851
Deferred Income Taxes 38,986 27,807
Equity in Earnings of CDC and Joint Ventures (3,742) (1,671)
Minority Interest in Earnings of Subsidiaries 35,343 25,900
Decrease (Increase) in Receivables 7,525 (9,458)
(Increase) Decrease in Residential Mortgage Loans (192,543) 3,667
(Increase) Decrease in Inventories (151,120) 29,024
(Decrease) Increase in Payables and Accruals (34,606) 16,924
Increase in Other Assets (25,272) (31,328)
Other, net (32,684) 1,225
--------- ---------
(239,067) 149,463
--------- ---------
CASH FLOWS - INVESTING ACTIVITIES
Decrease in Advances to CDC and Joint Ventures 7,344 2,291
Increase in Property and Equipment, net (33,594) (4,099)
--------- ---------
(26,250) (1,808)
--------- ---------
CASH FLOWS - FINANCING ACTIVITIES
Increase (Decrease) in Debt 312,653 (90,522)
Proceeds from Stock Option Exercises 16,455 7,099
Dividends Paid (5,612) (4,293)
--------- ---------
323,496 (87,716)
--------- ---------
NET INCREASE IN CASH 58,179 59,939
CASH AT BEGINNING OF PERIOD 31,320 14,042
--------- ---------
CASH AT END OF PERIOD $ 89,499 $ 73,981
========= =========
</TABLE>
See notes to condensed consolidated financial statements.
-5-
<PAGE> 9
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 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 -- -- -- 100,781 100,781
Exercise of Stock Options -- 169 16,286 -- 16,455
Cash Dividends -- -- -- (5,612) (5,612)
--------- --------- --------- --------- ---------
BALANCE, DECEMBER 31, 1997 $ -- $ 7,423 $ 35,075 $ 904,903 $ 947,401
========= ========= ========= ========= =========
</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. (CDC). 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:
-6-
<PAGE> 10
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>
December 31, March 31,
1997 1997*
------------ ------------
<S> <C> <C>
ASSETS
Cash and Cash Equivalents $ 90,091 $ 31,950
Receivables 1,180,781 989,886
Inventories 1,189,596 1,041,855
Investments in Joint Ventures 5,812 5,479
Property and Equipment, net 302,161 293,143
Other Assets 307,978 327,281
------------ ------------
$ 3,076,419 $ 2,689,594
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable and Accrued Liabilities $ 707,308 $ 740,230
Short-term Debt 948,563 634,573
Long-term Debt 240,183 236,769
Minority Stockholders' Interest 144,889 142,230
Negative Goodwill 86,837 98,837
Stockholders' Equity 948,639 836,955
------------ ------------
$ 3,076,419 $ 2,689,594
============ ============
</TABLE>
*Condensed from audited financial statements
SUPPLEMENTARY CONDENSED COMBINED STATEMENT OF EARNINGS
(dollars in thousands)
For the Nine Months Ended
December 31,
-----------------------------
1997 1996
------------ ------------
Revenues $ 2,847,726 $ 2,840,658
Costs and Expenses 2,687,629 2,721,279
------------ ------------
Earnings Before Income Taxes 160,097 119,379
Income Taxes 59,256 41,642
------------ ------------
NET EARNINGS $ 100,841 $ 77,737
============ ============
-7-
<PAGE> 11
Notes - continued
(C) In order to assure the future availability of land for its Home Building
operation, the Company has made deposits totaling $22 million as of
December 31, 1997 for options to purchase undeveloped land and developed
lots having a total purchase price of approximately $573 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 $8 million. In addition, the Company has executed lot
purchase contracts with CDC which aggregate approximately $7 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>
Nine Months Ended
-----------------------
12/31/97 12/31/96
-------- --------
<S> <C> <C>
Total Interest Incurred $ 56,491 $ 50,946
Less - Financial Services (31,673) (24,186)
-------- --------
Interest Expense $ 24,818 $ 26,760
======== ========
</TABLE>
(E) During April, 1994, Centex Construction Products, Inc. (CXP) completed
an initial public offering of its stock which began trading on the New
York Stock Exchange under the symbol "CXP". Centex's ownership interest
in CXP was 54.6% as of December 31, 1997.
(F) During the quarter ended June 30, 1996, Centex's Home Building
subsidiary completed a business combination transaction and
reorganization with Vista Properties, Inc. 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. 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.
(G) During March, 1997, Centex Real Estate Corporation acquired 78% of Cavco
Industries, Inc.'s (Cavco) outstanding common stock for a total of $74.3
million. 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.
-8-
<PAGE> 12
Notes - continued
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. This Statement is effective for financial statements issued for
periods ending after December 15, 1997, and requires restatement of all
prior- period EPS data presented. The following tables reconcile the
computation of basic EPS and diluted EPS for the quarter and nine months
ended December 31, 1997 and December 31, 1996.
<TABLE>
<CAPTION>
For the Three Months Ended
December 31, 1997
---------------------------------------
Income Shares Per-Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
<S> <C> <C> <C>
BASIC EPS - Net earnings available
to common stockholders $37,380,000 29,683,411 $1.26
=====
EFFECT OF DILUTIVE SECURITIES
Options -- 996,325
Convertible debenture 25,360 200,000
----------- -----------
DILUTED EPS - Net earnings available to common
stockholders + assumed conversions $37,405,360 30,879,736 $1.21
=========== =========== =====
</TABLE>
<TABLE>
<CAPTION>
For the Nine Months Ended
December 31, 1997
-----------------------------------------
Income Shares Per-Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
<S> <C> <C> <C>
BASIC EPS - Net earnings available
to common stockholders $100,781,000 29,427,192 $3.42
=====
EFFECT OF DILUTIVE SECURITIES
Options -- 897,004
Convertible debenture 75,834 200,000
------------ ------------
DILUTED EPS - Net earnings available to common
stockholders + assumed conversions $100,856,834 30,524,196 $3.30
============ ============ =====
</TABLE>
Note: Options to purchase 10,000 shares of common stock at
approximately $65 per share (expiring in November, 2007) were
outstanding during the quarter ended and as of December 31, 1997 but
were not included in the computation of diluted EPS because the options'
exercise price was greater than the average market price of the common
shares.
-9-
<PAGE> 13
Notes - continued
<TABLE>
<CAPTION>
For the Three Months Ended
December 31, 1996
--------------------------------------
Income Shares Per-Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
<S> <C> <C> <C>
BASIC EPS - Net earnings available
to common stockholders $27,463,000 28,670,420 $.96
====
EFFECT OF DILUTIVE SECURITIES
Options -- 800,263
Convertible debenture 24,872 200,000
----------- -----------
DILUTED EPS - Net earnings available to common
stockholders + assumed conversions $27,487,872 29,670,683 $.93
=========== =========== ====
</TABLE>
<TABLE>
<CAPTION>
For the Nine Months Ended
December 31, 1996
--------------------------------------
Income Shares Per-Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
<S> <C> <C> <C>
BASIC EPS - Net earnings available
to common stockholders $77,522,000 28,549,797 $2.72
=====
EFFECT OF DILUTIVE SECURITIES
Options -- 768,989
Convertible debenture 73,689 200,000
----------- -----------
DILUTED EPS - Net earnings available to common
stockholders + assumed conversions $77,595,689 29,518,786 $2.63
=========== =========== =====
</TABLE>
(I) In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income", which requires that changes in comprehensive income be shown in
a financial statement that is displayed with the same prominence as
other financial statements. This Statement is effective for fiscal years
beginning after December 15, 1997. The Company does not expect adoption
of the Statement to have a material effect on the presentation of its
financial statements.
In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 131, "Disclosures About Segments
of an Enterprise and Related Information", (SFAS No. 131) which changes
the way public companies report information about segments. SFAS No.
131, which is based on the management approach to segment reporting,
requires companies to report selected quarterly segment information and
entity-wide disclosures about products and services, major customers,
and the material countries in which the entity holds assets and reports
revenues. This Statement is effective for financial statements for
fiscal years beginning after December 15, 1997. The Company does not
expect adoption of the Statement to have a material effect on the
presentation of its financial statements.
-10-
<PAGE> 14
CENTEX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
Centex's consolidated revenues for the quarter were $983.1 million, a 5%
increase over $939.1 million for the same quarter last year. Earnings before
income taxes were $58.9 million, 39% higher than $42.5 million last year. Net
earnings were $37.4 million and diluted earnings per share were $1.21 for this
quarter compared to $27.5 million and $.93, respectively, for the same quarter
last year.
For the nine months ended December 31, 1997, corporate revenues totaled
$2.8 billion, about equal to revenues for the same period last year. Earnings
before income taxes were $160.0 million, 34% higher than $119.2 million for the
same period last year. Net earnings were a record $100.8 million and diluted
earnings per share were $3.30 for the current nine months compared to $77.5
million and $2.63 last year.
HOME BUILDING
Conventional Housing
The following summarizes Conventional Housing results for the quarter
and fiscal year-to-date ended December 31, 1997 compared to the quarter and
fiscal year-to-date ended December 31, 1996 (dollars in millions, except per
unit data):
<TABLE>
<CAPTION>
Quarter Ended Quarter Ended
12/31/97 12/31/96
--------------------------- --------------------------
<S> <C> <C> <C> <C>
Conventional Housing Revenues $ 557.5 100.0% $ 566.7 100.0%
Cost of Sales (441.9) (79.3%) (464.3) (81.9%)
Selling, General & Administrative (73.3) (13.1%) (65.6) (11.6%)
---------- ---------- ---------- ----------
Operating Earnings $ 42.3 7.6% $ 36.8 6.5%
========== ========== ========== ==========
Units Closed 3,025 3,226
% Change (6.2%) 9.4%
Unit Sales Price $ 181,266 $ 172,536
% Change 5.1% 4.4%
Operating Earnings per Unit $ 13,980 $ 11,425
% Change 22.4% 17.8%
</TABLE>
<TABLE>
<CAPTION>
Fiscal Fiscal
Year-to-Date Year-to-Date
12/31/97 12/31/96
-------------------------- --------------------------
<S> <C> <C> <C> <C>
Conventional Housing Revenues $ 1,605.2 100.0% $ 1,704.2 100.0%
Cost of Sales (1,278.6) (79.7%) (1,394.1) (81.8%)
Selling, General & Administrative (215.3) (13.4%) (206.1) (12.1%)
---------- ---------- ---------- ----------
Operating Earnings $ 111.3 6.9% $ 104.0 6.1%
========== ========== ========== ==========
Units Closed 8,709 9,835
% Change (11.4%) 15.4%
Unit Sales Price $ 181,716 $ 169,845
% Change 7.0% 4.2%
Operating Earnings per Unit $ 12,775 $ 10,577
% Change 20.8% 25.9%
</TABLE>
-11-
<PAGE> 15
Home closings for the quarter were 3,025 units, 6% less than 3,226 for
the same quarter last year. Home sales (orders) were 2,591 for the quarter this
year, compared to 2,567 units for the same quarter a year ago. Home closings
for the nine months this year totaled 8,709 units, 11% less than closings of
9,835 units for the same period a year ago. Unit orders for the current nine
months were 8,824, 6% higher than 8,319 units for the same period last year.
The backlog of homes sold but not closed at December 31, 1997 was 4,423 units,
10% higher than 4,017 units at December 31, 1996. Centex is currently operating
slightly fewer neighborhoods than it did a year ago.
The operating earnings for the quarter and nine months ended December
31, 1997 increased as a percentage of revenue and on a per unit basis compared
to the same periods last year primarily as a result of Centex Homes' continuing
focus on improved efficiency throughout its operations.
Manufactured Housing
The following summarizes Manufactured Housing's results for the quarter
and fiscal year-to-date ended December 31, 1997 (dollars in millions):
<TABLE>
<CAPTION>
Fiscal
Quarter Ended Year-to-Date
12/31/97 12/31/97
-------------------- --------------------
<S> <C> <C> <C> <C>
Manufactured Housing Revenues $ 38,239 100.0% $ 103,727 100.0%
Cost of Sales (30,967) (81.0%) (83,387) (80.4%)
Selling, General & Administrative (3,228) (8.4%) (10,094) (9.7%)
--------- ----- --------- -----
Earnings Before Goodwill and
Minority Interest 4,044 10.6% 10,246 9.9%
===== =====
Goodwill Amortization (573) (1,719)
Minority Interest (742) (2,042)
--------- ---------
Operating Earnings $ 2,729 $ 6,485
========= =========
Units Produced 1,601 4,219
========= =========
</TABLE>
The Manufactured Housing operation was acquired in late March 1997.
Accordingly, there is no comparative data for the quarter and fiscal
year-to-date ended December 31, 1996.
INVESTMENT REAL ESTATE
For the quarter ended December 31, 1997, Centex's Investment Real Estate
operation, through which all investment property transactions are reported, had
operating earnings of $7.1 million, 27% higher than $5.6 million last year.
For the current nine months, operating earnings from Investment Real
Estate were $21.8 million, a 71% improvement over operating earnings of $12.8
million for the same period in the prior year.
-12-
<PAGE> 16
FINANCIAL SERVICES
The following summarizes Financial Services' results for the quarter and
fiscal year-to-date ended December 31, 1997 compared to the quarter and fiscal
year-to-date ended December 31, 1996 (dollars in millions):
<TABLE>
<CAPTION>
Fiscal Fiscal
Quarter Ended Quarter Ended Year-to-date Year-to-date
12/31/97 12/31/96 12/31/97 12/31/96
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues $ 64.6 $ 38.2 $ 169.1 $ 117.1
------------- ------------- ------------- -------------
Operating Earnings $ 8.5 $ 7.2 $ 21.3 $ 19.4
------------- ------------- ------------- -------------
Origination Volume $ 1,744 $ 1,316 $ 4,836 $ 4,100
------------- ------------- ------------- -------------
Number of Loans Originated
CTX Mortgage -
Centex-built Homes ("Builder") 2,127 2,275 6,085 7,220
Non-Centex-built Homes ("Retail") 10,426 7,931 30,258 26,155
------------- ------------- ------------- -------------
12,553 10,206 36,343 33,375
Centex Home Equity 2,341 1,507 5,161 2,434
------------- ------------- ------------- -------------
14,894 11,713 41,504 35,809
============= ============= ============= =============
</TABLE>
CTX Mortgage Company's (CTX) builder applications for the quarter of
2,000 increased 26% over last year while Retail applications rose 45% to
10,025. Builder applications of 6,544 for the nine month period were 10% higher
than a year ago. Retail applications increased 24% from 24,771 a year ago to
30,626 for the nine months. CTX's profit per loan of $841 for this year's
quarter was a 36% improvement over the per loan profit of $620 for last year's
quarter as a result of increased originations and the centralization of certain
back-office functions.
Centex Home Equity Corporation (CHEC) generated 7,645 "B & C" loan
applications for the quarter, an increase of 32% compared to the same quarter a
year ago. CHEC applications for the nine months rose 47% to 16,283. Operating
earnings for the quarter reflect continuing start-up costs of approximately $2
million for CHEC and the recently formed Centex Finance Company.
CONSTRUCTION PRODUCTS
Revenues from CXP were $70.5 million for the quarter this year, 19%
higher than last year. CXP's operating earnings, net of minority interest, were
$11.2 million for the quarter this year, 27% higher than last year's earnings.
CXP's revenues for the current nine months were $231.9 million, 25% higher than
last year. CXP's operating earnings, net of minority interest, were a record
$38.6 million, a 45% improvement over results for the same period a year ago.
CXP's record results were due to higher product sales volumes,
particularly the increased gypsum wallboard sales related to the acquisition of
the Eagle Gypsum plant in late fiscal 1997. CXP's earnings also were favorably
impacted by continued strong product demand and higher average cement and
gypsum wallboard pricing.
-13-
<PAGE> 17
CONTRACTING AND CONSTRUCTION SERVICES
The following summarizes Contracting and Construction Services' results
for the quarter and fiscal year-to-date ended December 31, 1997 compared to the
quarter and fiscal year-to-date ended December 31, 1996 (dollars in millions):
<TABLE>
<CAPTION>
Fiscal Fiscal
Quarter Ended Quarter Ended Year-to-Date Year-to-Date
12/31/97 12/31/96 12/31/97 12/31/96
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues $ 246.2 $ 270.3 $ 708.1 $ 819.3
------------- ------------- ------------- -------------
Operating Earnings (Loss) $ 2.5 $ (3.0) $ 4.7 $ (2.7)
------------- ------------- ------------- -------------
New Contracts Received $ 122 $ 334 $ 613 $ 831
------------- ------------- ------------- -------------
Backlog of Uncompleted Contracts $ 1,019 $ 1,213 $ 1,019 $ 1,213
------------- ------------- ------------- -------------
</TABLE>
Although Contracting and Construction Services continues to operate in
an intensely competitive environment, nonresidential construction is improving
as the economy strengthens and profit margins on contracts recently acquired by
the group continue to improve. During the current and prior fiscal years, the
Contracting and Construction Services operation has provided a positive average
net cash flow in excess of Centex's investment in the group of approximately
$55-60 million.
In October 1992 Martin County sued one of the Company's general
contracting subsidiaries, Centex-Rooney Construction Co., Inc. ("Rooney"),
alleging defects in the design and construction of the Martin County Courthouse
in Stuart, Florida. Rooney was construction manager of the project. In July
1996 a judgment of $14.2 million was returned against Rooney, and in April 1997
Martin County also obtained a judgment of $3.2 million in attorney's fees and
costs. Both judgments, together with interest, currently approach $20 million.
Recently, the 4th District Court of Appeals affirmed the $14.2 million judgment
and Rooney is now preparing a motion for re-hearing and an appeal to the
Supreme Court of Florida. Rooney's appeal of the $3.2 million award is still
pending. At this time, Rooney is prosecuting claims and lawsuits against
sub-contractors, their insurance carriers and Rooney's own insurance carriers
for recovery of the judgments. One of Rooney's carriers has agreed to pay
approximately $3.5 million. While there is no assurance that Rooney's appeal
will be successful or that it will recover from such sub-contractors or other
insurance carriers, management believes that Rooney will be able to recover
substantially all of both judgments. In any case, these judgments would not
have a material impact on the financial condition of the Company.
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 $700 million of committed credit
facilities and approximately $600 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 $312.7 million increase in debt was primarily used to fund the
increase in both residential mortgage loans and inventories. The increase in
residential mortgage loans is primarily due to an increase in mortgage
refinancing activity which is attributed to continuing favorable mortgage
interest rates.
The Company believes it has adequate resources and sufficient credit
facilities to satisfy its current needs and provide for future growth.
-14-
<PAGE> 18
OTHER DEVELOPMENTS AND OUTLOOK
During the quarter, Centex's Board of Directors authorized a two-for-one
split of its common stock subject to certain conditions, including stockholder
approval of an amendment to Centex Corporation's Restated Articles of
Incorporation that will double the number of authorized shares from 50 to 100
million. Stockholders approved the amendment at a special meeting of the Centex
stockholders on February 4, 1998. The split will be effected by the issuance of
one additional share of stock for each share outstanding on the record date,
which will be February 13, 1998. Distribution of the additional shares will
occur on February 27, 1998. Following the stock split, the Company's current
quarterly dividend of 7 cents per share will be increased to 4 cents on each of
the new shares, resulting in a 14% gain in the post split quarterly dividend.
Also during the quarter, Centex Financial Services formed Centex Finance
Company, a Phoenix, Arizona-based operation providing lending services to
customers of manufactured housing dealers. The new entity initiated operations
in Arizona in order to take advantage of the dealer network serving Cavco
Industries, Centex's manufactured housing company. Centex Finance Company will
also target additional dealerships in Arizona and is adding representatives in
other states.
Favorable interest rates and the strong national economy in recent
months have positively affected the Company's businesses. If interest rates and
general economic conditions remain at or near current levels, Centex's Home
Building results will exceed fiscal 1997's record performance. Centex's other
businesses also should continue to report improved results, including CXP which
is on track to have its fourth consecutive year of record earnings.
As a result, Centex's fiscal 1998 financial results should surpass
fiscal 1997's all-time-high earnings.
----------------------------------------
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, investment real estate, 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.
-15-
<PAGE> 19
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 December 31, 1997.
All other items required under Part II are omitted because they are not
applicable.
-16-
<PAGE> 20
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
February 12, 1998 /s/ David W. Quinn
------------------------------
David W. Quinn
Vice Chairman and
Chief Financial Officer
(principal financial officer)
February 12, 1998 /s/ Barry G. Wilson
------------------------------
Barry G. Wilson
Controller
(chief accounting officer)
-17-
<PAGE> 21
This page intentionally left blank
-18-
<PAGE> 22
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.
-19-
<PAGE> 23
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 December 31,
----------------------------------------------------------------------------------------
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 $ 9,228 $ 9,123 $ 310 $ 4,026 $ 3,932 $ 307
Costs and Expenses 6,194 6,069 330 3,382 3,224 371
------------ ------------ ------------ ------------ ------------ ------------
Earnings (Loss) Before Income Taxes 3,034 3,054 (20) 644 708 (64)
Income Taxes -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
NET EARNINGS (LOSS) $ 3,034 $ 3,054 $ (20) $ 644 $ 708 $ (64)
============ ============ ============ ============ ============ ============
EARNINGS (LOSS) PER SHARE/UNIT
(Average Outstanding Shares,
1,000; Units, 1,000) $ 3,054 $ (20) $ 708 $ (64)
============ ============ ============ ============
</TABLE>
See notes to condensed combining financial statements.
-20-
<PAGE> 24
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 Nine Months Ended December 31,
----------------------------------------------------------------------------------------
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 $ 16,063 $ 15,748 $ 1,059 $ 8,323 $ 7,945 $ 1,331
Costs and Expenses 11,890 11,635 999 7,414 7,251 1,116
------------ ------------- ------------ ------------ ------------- ------------
Earnings Before Income Taxes 4,173 4,113 60 909 694 215
Income Taxes -- -- -- -- -- --
------------ ------------- ------------ ------------ ------------- ------------
NET EARNINGS $ 4,173 $ 4,113 $ 60 $ 909 $ 694 $ 215
============ ============= ============ ============ ============= ============
EARNINGS PER SHARE/UNIT
(Average Outstanding Shares,
1,000; Units, 1,000) $ 4,113 $ 60 $ 694 $ 215
============= ============ ============= ============
</TABLE>
See notes to condensed combining financial statements.
-21-
<PAGE> 25
3333 HOLDING CORPORATION AND SUBSIDIARY
AND CENTEX DEVELOPMENT COMPANY, L.P.
CONDENSED COMBINING BALANCE SHEETS
(dollars in thousands)
<TABLE>
<CAPTION>
December 31, 1997* March 31, 1997**
------------------------------------------ ------------------------------------------
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>
ASSETS
Cash $ 592 $ 585 $ 7 $ 630 $ 625 $ 5
Accounts Receivable 321 4,560 184 312 868 176
Notes Receivable -
Centex Corporation and Subsidiaries 7,700 -- 7,700 7,700 -- 7,700
Other 8,241 8,241 -- 2,365 2,365 --
Investment in Affiliate -- -- 767 -- -- 767
Investment in Real Estate Joint Venture 69 69 -- 202 202 --
Projects Held for Development & Sale 35,479 35,479 -- 38,918 38,918 --
Other Assets 100 100 -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
$ 52,502 $ 49,034 $ 8,658 $ 50,127 $ 42,978 $ 8,648
============ ============ ============ ============ ============ ============
LIABILITIES, STOCKHOLDERS' EQUITY AND PARTNERS' CAPITAL
Accounts Payable and Accrued
Liabilities $ 4,311 $ 4,102 $ 4,632 $ 2,648 $ 2,410 $ 970
Notes Payable -
Centex Corporation and Subsidiaries 3,288 -- 3,288 7,000 -- 7,000
Other 11,806 11,806 -- 7,055 7,055 --
Land Sale Deposits 10 10 -- 10 10 --
------------ ------------ ------------ ------------ ------------ ------------
Total Liabilities 19,415 15,918 7,920 16,713 9,475 7,970
Stockholders' Equity and
Partners' Capital 33,087 33,116 738 33,414 33,503 678
------------ ------------ ------------ ------------ ------------ ------------
$ 52,502 $ 49,034 $ 8,658 $ 50,127 $ 42,978 $ 8,648
============ ============ ============ ============ ============ ============
</TABLE>
* Unaudited
** Condensed from audited financial statements.
See notes to condensed combining financial statements.
-22-
<PAGE> 26
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 Nine Months Ended December 31,
----------------------------------------------------------------------------------
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 $ 4,173 $ 4,113 $ 60 $ 909 $ 694 $ 215
Net Change in Payables, Accruals,
Deposits and Receivables 1,655 (1,999) 3,654 (309) (95) (214)
(Increase) Decrease in Notes Receivable (5,877) (5,877) -- 1,439 1,439 --
Decrease (Increase) in Advances to
Joint Venture 133 133 -- (101) (101) --
Decrease in Projects Held for
Development and Sale 3,439 3,439 -- 4,891 4,891 --
Increase in Other Assets (100) (100) -- (3,000) (3,000) --
----------- ----------- ----------- ----------- ----------- -----------
3,423 (291) 3,714 3,829 3,828 1
----------- ----------- ----------- ----------- ----------- -----------
CASH FLOWS - FINANCING ACTIVITIES
(Decrease) Increase in Notes Payable -
Centex Corporation and Subsidiaries (3,712) -- (3,712) -- -- --
Other 4,751 4,751 -- (1,373) (1,373) --
Capital Distributions (4,500) (4,500) -- (2,000) (2,000) --
----------- ----------- ----------- ----------- ----------- -----------
(3,461) 251 (3,712) (3,373) (3,373) --
----------- ----------- ----------- ----------- ----------- -----------
NET (DECREASE) INCREASE IN CASH (38) (40) 2 456 455 1
CASH AT BEGINNING OF YEAR 630 625 5 231 225 6
----------- ----------- ----------- ----------- ----------- -----------
CASH AT END OF PERIOD $ 592 $ 585 $ 7 $ 687 $ 680 $ 7
=========== =========== =========== =========== =========== ===========
</TABLE>
See notes to condensed combining financial statements.
-23-
<PAGE> 27
3333 HOLDING CORPORATION AND SUBSIDIARY
AND CENTEX DEVELOPMENT COMPANY, L.P.
NOTES TO CONDENSED COMBINING FINANCIAL STATEMENTS
DECEMBER 31, 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
$220,000 and $855,000 for the quarter and nine months ended December
31, 1997 and $113,000 and $3,090,000 for the quarter and nine months
ended December 31, 1996, respectively. Additionally, during the nine
months ended December 31, 1997, the Partnership sold property located
in Carrollton, Texas to Centex Homes for $2,866,000.
(D) A summary of changes in stockholders' equity and partners' capital is
presented below (dollars in thousands).
<TABLE>
<CAPTION>
For the Nine Months Ended December 31, 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> <C>
Balance at March 31, 1997 $ 33,414 $ 500 $ 767 $ 32,236 $ 1 $ 800 $ (123)
Preference Payments (4,500) -- -- (4,500) -- -- --
Net Earnings 4,173 -- -- 4,113 -- -- 60
---------- ---------- ---------- ---------- ---------- ---------- ----------
BALANCE AT DECEMBER 31, 1997 $ 33,087 $ 500 $ 767 $ 31,849 $ 1 $ 800 $ (63)
========== ========== ========== ========== ========== ========== ==========
</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 nine months ended December 31, 1997, the Partnership made
preference payments to its limited partner, which is a Centex
affiliate, totaling $4.5 million. No preference payments were made
during the quarter. Preference in arrears at December 31, 1997 amounted
to $3.4 million and unrecovered capital totaled $32.8 million.
-24-
<PAGE> 28
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 and nine months ended
December 31, 1997 of $9.2 million and $16.1 million, respectively, included the
sale of commercial property in Texas, and residential property in Texas and
Florida. Revenues of $4.0 million and $8.3 million for the quarter and nine
months ended December 31, 1996, respectively, included the sale of commercial
property in Texas and residential property in Illinois and New Jersey. The
quarter ended December 31, 1997 resulted in combined net earnings of $3.0
million compared to net earnings of $644,000 for the same quarter last year.
The nine months ended December 31, 1997 resulted in combined net earnings of
$4.2 million compared to $909,000 for the same period last year. The increase
in earnings during the current year period reflects the continued improvement
in the north Texas real estate market. This improvement has been evidenced by
both higher margins on land sales and increased sales activity.
LIQUIDITY AND CAPITAL RESOURCES
Cash generated from sales and the principal collection on notes
receivable during the nine months ended December 31, 1997 was sufficient to
allow for the Partnership to make preference payments to its limited partner
totaling $4.5 million.
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.
-25-
<PAGE> 29
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 December 31, 1997.
All other items required under Part II are omitted because they are not
applicable.
-26-
<PAGE> 30
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
February 12, 1998 /s/ J. Stephen Bilheimer
---------------------------------
J. Stephen Bilheimer
President
February 12, 1998 /s/ Kimberly Pinson
---------------------------------
Kimberly Pinson
Vice President and Treasurer
(chief accounting officer)
-27-
<PAGE> 31
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
February 12, 1998 /s/ J. Stephen Bilheimer
-------------------------------------
J. Stephen Bilheimer
President
February 12, 1998 /s/ Kimberly Pinson
-------------------------------------
Kimberly Pinson
Vice President and Treasurer
(chief accounting officer)
-28-
<PAGE> 32
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
27 Financial Data Schedule
27.1 Financial Data Schedule
27.2 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CENTEX
CORPORATION'S DECEMBER 31, 1997, FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL INFORMATION.
</LEGEND>
<CIK> 0000018532
<NAME> CENTEX CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 89,499
<SECURITIES> 0
<RECEIVABLES> 1,172,403
<ALLOWANCES> 0
<INVENTORY> 1,152,879
<CURRENT-ASSETS> 0
<PP&E> 517,632
<DEPRECIATION> 215,471
<TOTAL-ASSETS> 3,059,159
<CURRENT-LIABILITIES> 0
<BONDS> 240,183
0
0
<COMMON> 7,423
<OTHER-SE> 939,978
<TOTAL-LIABILITY-AND-EQUITY> 3,059,159
<SALES> 2,836,204
<TOTAL-REVENUES> 2,836,204
<CGS> 2,601,728
<TOTAL-COSTS> 2,601,728
<OTHER-EXPENSES> 49,621
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 24,818
<INCOME-PRETAX> 160,037
<INCOME-TAX> 59,256
<INCOME-CONTINUING> 100,781
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 100,781
<EPS-PRIMARY> 3.42
<EPS-DILUTED> 3.30
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 3333 HOLDING
CORPORATION'S DECEMBER 31, 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> 9-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 7
<SECURITIES> 0
<RECEIVABLES> 7,884
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 8,658
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 1
<OTHER-SE> 737
<TOTAL-LIABILITY-AND-EQUITY> 8,658
<SALES> 1,059
<TOTAL-REVENUES> 1,059
<CGS> 999
<TOTAL-COSTS> 999
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 60
<INCOME-TAX> 0
<INCOME-CONTINUING> 60
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 60
<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 DECEMBER 31, 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> 9-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 585
<SECURITIES> 0
<RECEIVABLES> 12,801
<ALLOWANCES> 0
<INVENTORY> 35,479
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 49,034
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 500
<OTHER-SE> 32,616
<TOTAL-LIABILITY-AND-EQUITY> 49,034
<SALES> 15,748
<TOTAL-REVENUES> 15,748
<CGS> 11,635
<TOTAL-COSTS> 11,635
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4,113
<INCOME-TAX> 0
<INCOME-CONTINUING> 4,113
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,113
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
