<PAGE> 1
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 27, 2000
Centex Corporation
(Exact name of registrant as specified in its charter)
Nevada 1-6776 75-0778259
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
2728 N. Harwood, Dallas, Texas 75201
(Address of principal executive offices) (Zip code)
Registrant's telephone number including area code: (214) 981-5000
Not Applicable
(Former name or former address if changed from last report)
===============================================================================
<PAGE> 2
Item 5. Other Events.
On April 27, 2000 Centex Corporation, a Nevada corporation (the
"Company"), announced its financial results for the fiscal year ended March 31,
2000. A copy of the Company's press release announcing these financial results
is attached hereto as Exhibit 99.1 and incorporated herein by reference.
In addition to announcing its financial results in the press release,
the Company announced that its subsidiary Centex Credit Corporation, a Nevada
corporation doing business as Centex Home Equity Corporation ("CHEC"), has
elected, effective as of March 31, 2000, to change the structure of its future
mortgage loan securitizations. As a consequence of this change, CHEC will report
future operating results using an accounting method (the "Portfolio Method")
that treats mortgage loan securitizations as secured borrowings, instead of as
sales of the mortgage loans. CHEC has historically structured its mortgage loan
securitizations in a manner that required such securitizations be treated as
sales, with a corresponding gain on sale reported in operating results during
the period in which the securitization closed (the "Gain-on-Sale Method").
CHEC's prior securitizations provide that CHEC reacquire mortgage loans
from the securitization trust whenever the aggregate unpaid principal balance
declines to a level that, taking into account the cost to administer the trust,
makes it more economical to terminate the trust and call the loans (a so-called
"Clean-up Call"). According to Financial Accounting Standards Board Statement
No. 125, Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilities, securitizations with a nominal Clean-up Call
(generally 10% or less) must be reported using the Gain-on-Sale Method, whereas
securitizations with a greater-than-nominal Clean-up Call must be accounted for
as securitized borrowings and reported using the Portfolio Method. For
transactions completed after March 31, 2000, CHEC intends to set the Clean-up
Call at a level that is higher than the level considered to be nominal under
accounting rules. Accordingly, the revenues, costs and loan proceeds associated
with these future securitization transactions will be reported using the
Portfolio Method.
Although the change to the Portfolio Method will negatively impact
CHEC's operating results for fiscal year 2001, the Company announced that the
change from the Gain-on-Sale Method to the Portfolio Method will have no effect
on the profit recognized over the life of each mortgage loan. Rather, the
accounting change will merely change the timing of profit recognition. Under the
Gain-on-Sale Method, projected profit was recognized at the time the security
was created. Now, under the Portfolio Method, CHEC will recognize earnings over
the life of the loans (interest income less interest expense and credit losses).
As a result, CHEC's reported earnings from each loan under the Portfolio Method
will be lower at the time the security is first created (compared to the
Gain-on-Sale Method) but higher as mortgage loan payments are received during
the life of the securitizations.
CHEC securitizes sub-prime mortgage loans in order to obtain access to
public sources of capital and liquidity. Since February 1998, CHEC has completed
nine securitizations totaling approximately $2.4 billion of sub-prime mortgage
loans. The Company expects CHEC to access the securitization market on a regular
basis in the future and that such securitizations will likely remain the
principal funding source for CHEC.
2
<PAGE> 3
FORWARD-LOOKING STATEMENTS
This report on Form 8-K contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, Section 21E of the
Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act
of 1995. Forward-looking statements may be identified by the context of the
statement and generally arise when the Company is discussing its beliefs,
estimates or expectations. These statements are not guarantees of future
performance and involve a number of risks and uncertainties. Actual results may
differ materially from what is expressed or forecast in such forward-looking
statements. The principal risks and uncertainties that may affect the Company's
actual performance and results of operations include the following: general
economic conditions and interest rates; the cyclical and seasonal nature of the
Company's businesses; federal mortgage financing programs; governmental
regulation; changes in governmental and public policy; and unexpected
operational difficulties. Other risks and uncertainties may also affect the
outcome of the Company's performance and actual results of operations. Please
see the Company's most recent reports on Form 10-K and Form 10-Q for a more
comprehensive list of risks and uncertainties affecting the Company's actual
performance and results of operations.
Item 7. Financial Statements and Exhibits.
Exhibit
Number Description
- ------- -----------
99.1 Press Release dated April 27, 2000
3
<PAGE> 4
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, hereunto duly authorized.
CENTEX CORPORATION
By: /s/ Raymond G.Smerge
--------------------------------
Name: Raymond G. Smerge
Title:Executive Vice President,
Chief Legal Officer and Secretary
Date: May 1, 2000
4
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
99.1 Press Release dated April 27, 2000
</TABLE>
<PAGE> 1
CENTEX REPORTS RECORD FOURTH QUARTER RESULTS
COMPANY MARKS FOURTH CONSECUTIVE RECORD YEAR
(DALLAS, TX April 27, 2000): Centex Corporation (NYSE: CTX) today
announced the highest quarterly earnings in its history for the quarter ended
March 31, 2000, the fourth quarter of fiscal 2000, as well as record results for
the fiscal year.
For this year's fourth quarter, Centex reported net earnings of
$70,025,000, a 3% increase over $68,195,000 for the same quarter last year.
Diluted earnings per share of $1.17 this year were 6% higher than $1.10 per
diluted share for the same quarter a year ago. Revenues for the fourth quarter
this year rose 12% to $1,725,529,000 from $1,545,066,000 for the same quarter in
fiscal 1999.
During the quarter, as a result of increased current and projected
interest rates, the Company made an adjustment related to sub-prime loan
securitizations which reduced net earnings by $10 million ($0.17 per diluted
share). As described later in this release, the Company is also changing to the
"Portfolio Method" to account for all future sub-prime loan securitizations.
For fiscal 2000, Centex reported an 11% increase in net earnings to
$257,132,000 from net earnings of $231,962,000 for fiscal 1999. Diluted earnings
per share of $4.22 were 13% higher than $3.75 a year ago. Consolidated revenues
for fiscal 2000 reached an all-time high $5,956,366,000, a 16% improvement over
$5,154,840,000 for fiscal 1999. Centex's return on beginning stockholders'
equity was 21.5% for fiscal 2000 versus 23.4% for fiscal 1999.
Earnings per share for both the quarter and the year rose a higher
percentage than net earnings due to fewer average shares outstanding in the
current periods.
(MORE)
<PAGE> 2
CENTEX REPORTS FOURTH QUARTER AND FISCAL 2000 RESULTS, PAGE 2 OF 7
The record financial results for the quarter and the year were due
primarily to all-time high results from the Company's Home Building,
Construction Products, and Contracting and Construction Services operations.
Through its subsidiaries, Centex ranks among the nation's leading home
builders, non-bank-affiliated retail mortgage banking lenders and commercial
contractors. Centex also has an investment real estate operation and currently
owns approximately 65% of Centex Construction Products, Inc., a publicly traded
company.
HOME BUILDING
Operating earnings from Centex Homes (Conventional Homes) were $120.5
million for the fourth quarter this year, 32% higher than $91.3 million for the
fourth quarter a year ago, primarily due to a record number of closings.
Operating earnings from Cavco Industries (Manufactured Homes) were $518,000 for
the quarter this year, 74% lower than a year ago, primarily due to a 26% decline
in unit sales and to costs associated with its retail operation. Total operating
earnings from Home Building reached $121.1 million for the quarter this year,
30% higher than $93.3 million for last year's fourth quarter.
Current year fourth quarter revenues from Conventional Homes were $1.2
billion this year, a 31% increase over $937.9 million for the same quarter last
year. Manufactured Homes revenues for the current quarter were $37.5 million,
21% less than $47.8 million for the same quarter a year ago. Total Home Building
revenues reached $1.3 billion for this year's fourth quarter, 28% higher than
$985.7 million for the same quarter in fiscal 1999.
Closings of Conventional Homes reached 6,050 units for the quarter this
year, an all-time high and 28% above 4,742 closings for last year's fourth
quarter. Home sales (orders) for this year's quarter totaled a record 6,216
units, 22% higher than sales of 5,115 units for the same quarter last year. The
backlog of homes sold but not closed at March 31, 2000 was 7,579 units, 12%
higher than the 6,792 unit backlog at March 31, 1999.
The average Conventional Homes sales price for this year's fourth
quarter was $197,884, 5% higher than $188,963 for the same quarter last year.
The per unit operating margin for the quarter this year was a record $19,924,
slightly higher than $19,243 for the same quarter last year. The Conventional
Homes operating margin as a percent of revenue was 9.8% for the fiscal 2000
fourth quarter compared to 9.7% for the same quarter last year.
Manufactured Homes sold 1,227 units for the fourth quarter this year
versus 1,660 units for the same quarter a year ago. The Manufactured Homes
operating margin as a percent of revenue, before the inclusion of Cavco's retail
sales operation, was 8.2% for the quarter this year versus 9.9% for the fourth
quarter last year.
(MORE)
<PAGE> 3
CENTEX REPORTS FOURTH QUARTER AND FISCAL 2000 RESULTS, PAGE 3 OF 7
Fiscal 2000 operating earnings from Conventional Homes reached a record
$323.2 million, 33% higher than the $242.2 million of operating earnings
reported in fiscal 1999. Fiscal year operating earnings from Manufactured Homes,
net of minority interest, were $7.3 million, 29% lower than fiscal 1999
earnings. Total operating earnings from Home Building of $330.5 million for
fiscal 2000 surpassed fiscal 1999's record results by 31%.
For the year, Conventional Homes revenues were $3.7 billion, a 31%
improvement over last year's revenues. Manufactured Homes revenues of $183.5
million were 3% higher than fiscal 1999 revenues. Total Home Building revenues
for fiscal 2000 reached $3.9 billion, 29% higher than the prior year's revenues.
Conventional Homes closings for fiscal 2000 totaled a record 18,904
units, 28% higher than fiscal 1999 closings of 14,792 units. Fiscal 2000 orders
for Conventional Homes rose 22% to 19,407 units from 15,931 units last year.
Centex's average Conventional Homes sales price for fiscal 2000 was
$191,568, slightly higher than fiscal 1999's average sales price of $185,668.
Operating earnings per closed unit averaged $17,098 this year, versus $16,375 a
year ago. Operating margin as a percent of revenue was 8.8% for fiscal 2000
versus 8.6% for fiscal 1999.
Manufactured Homes sold 5,950 units during fiscal 2000, 8% less than
last year's sales. The Manufactured Homes operating margin, prior to the
inclusion of Cavco's retail sales operation, was 10.8% this year versus 11.6% in
fiscal 1999.
INTERNATIONAL HOME BUILDING
London, England-based Fairclough Homes, which was acquired in April
1999 by Centex Development Company, L.P., built and closed 1,707 homes during
fiscal 2000. Due to the unique structure of the transaction, no significant
earnings from Fairclough will be reported prior to April 2001.
INVESTMENT REAL ESTATE
For the quarter ended March 31, 2000, Centex's Investment Real Estate
operation, through which all investment property transactions are reported, had
operating earnings of $6 million, 16% less than earnings of $7.2 million for the
same quarter a year ago. For fiscal 2000, Investment Real Estate operating
earnings were $30.1 million, 2% higher than last year's results.
FINANCIAL SERVICES
Centex Home Equity Corporation's (CHEC) existing portfolio of sub-prime
loans is performing in accordance with or better than the assumptions used in
connection with its "Gain on Sale" securitizations and is among the best
performing in the industry.
(MORE)
<PAGE> 4
CENTEX REPORTS FOURTH QUARTER AND FISCAL 2000 RESULTS, PAGE 4 OF 7
Nevertheless, as a result of increased current and projected interest
rates, CHEC increased the discount rate used to value future cash flows from
such securitizations from 12% to 15% during the quarter. The discount rate
increase resulted in a $16 million reduction in CHEC's earnings for the quarter
ended March 31, 2000.
In addition, Centex has concluded that the long-term benefits of
converting to the "Portfolio Method" to report CHEC's operating results
significantly outweigh the short-term benefit of higher earnings under the "Gain
on Sale" method previously used for its mortgage loan securitizations. The
change from "Gain on Sale" accounting to the "Portfolio Method" will have no
effect on the profit recognized over the life of each mortgage loan. Rather, the
adjustment will merely change the timing of profit recognition.
Under the "Gain on Sale" method, projected profit was recognized at the
time the security was created. Now, under the "Portfolio Method," CHEC will
recognize earnings over the life of the loans (interest income less interest
expense and credit losses). As a result, CHEC's reported earnings from each loan
under the "Portfolio Method" will be lower at the time of securitization
(compared to the "Gain on Sale" method) but higher as mortgage loan payments are
received during the life of the securitizations. Accordingly, effective as of
March 31, 2000, CHEC will structure all of its future loan securitizations in a
manner that results in the utilization of the more conservative and predictable
"Portfolio Method" for reporting its operating results. This change will
negatively impact CHEC's operating results in fiscal 2001.
Summarized below are the operating results for the Financial Services
group:
<TABLE>
<CAPTION>
Operating Earnings ($ in Millions)
Periods Ending March 31,
Quarter Fiscal Year
---------------------------- ----------------------------
2000 1999 2000 1999
============ ============ ============ =============
<S> <C> <C> <C> <C>
Financial Services Group,
before adjustment $ 6.1 $ 20.7 $ 48.5 $ 92.3
Discount rate adjustment (16.0) - (16.0) -
------ -------- ------ ------
Financial Services Group,
after adjustment $ (9.9) $ 20.7 $ 32.5 $ 92.3
====== ======= ====== ======
COMPONENTS:
CTX Mortgage Company $ 3.4 $ 19.1 $ 33.9 $ 85.4
====== ======= ====== ======
Centex Home Equity Corporation,
before adjustment $ 3.7 $ 2.6 $ 18.7 $ 9.7
Discount rate adjustment (16.0) - (16.0) -
------ -------- ------ ------
</TABLE>
(MORE)
<PAGE> 5
CENTEX REPORTS FOURTH QUARTER AND FISCAL 2000 RESULTS, PAGE 5 OF 7
<TABLE>
<S> <C> <C> <C> <C>
CHEC Total $(12.3) $ 2.6 $ 2.7 $ 9.7
============ ============ ============ =============
Centex Finance, manufactured
housing finance (discontinued) $ (1.0) $ (1.0) $ (4.1) $ (2.8)
============ ============ ============ =============
</TABLE>
The decline in the earnings of CTX Mortgage is related to a loss in
mortgage refinancings due to higher interest rates. The division's manufactured
housing finance business was discontinued because of deteriorating conditions in
that industry.
See detailed information regarding originations and applications for
both CTX and CHEC on Attachment 6.
CONSTRUCTION PRODUCTS
Operating earnings from Centex Construction Products, Inc. (CXP), net
of minority interest, were $22.9 million for the fourth quarter fiscal 2000, a
44% improvement over results for the same quarter in fiscal 1999. Revenues from
CXP were $95.3 million for the fourth quarter of fiscal 2000, 20% higher than
for the year ago period.
For fiscal 2000, operating earnings from CXP, net of minority interest,
were $104.9 million, 52% higher than fiscal 1999 earnings. Fiscal 2000 revenues
from CXP were $418.7 million, 25% higher than revenues for the prior year.
CXP's record results for both the quarter and the fiscal year were due
to improved performances by its Gypsum Wallboard and its Concrete and Aggregates
businesses.
CONTRACTING AND CONSTRUCTION SERVICES
Contracting and Construction Services reported operating earnings of
$6.0 million for the fourth quarter of fiscal 2000, 58% higher than earnings for
the same quarter last year. Revenues from this segment were $277.1 million for
the quarter this year, 21% less than revenues for the year ago quarter. New
contracts for the quarter totaled $337 million, a 218% increase over the new
contract total for the same quarter a year ago.
For fiscal 2000, Contracting and Construction Services reported
operating earnings of $23.5 million, 54% higher than fiscal 1999 earnings.
Revenues for fiscal 2000 were $1.2 billion, 11% less than prior year revenues.
During fiscal 2000, Contracting and Construction Services was awarded
approximately $1.6 billion of new contracts, a 46% increase over fiscal 1999's
new contract total. The backlog of uncompleted construction contracts at March
31, 2000 was $1.4 billion, a 47% increase over the backlog of $937 million at
March 31, 1999. Contracting operating profit margins continue to improve.
(MORE)
<PAGE> 6
CENTEX REPORTS FOURTH QUARTER AND FISCAL 2000 RESULTS, PAGE 6 OF 7
OTHER DEVELOPMENTS
During the quarter, Centex Title acquired Benefit Land Title Company
and Benefit Land Title Insurance Company ("Benefit") of Santa Ana, California.
Benefit currently writes approximately 18,000 title policies annually in
California. The acquisition provides Centex with an incremental underwriting
margin in addition to its current title/escrow agent fees.
In addition, Benefit will have the opportunity to service customers of
its sister companies, specifically the home building and mortgage lending
operations in California and in other states where it is licensed.
Also during the quarter, CHEC completed the securitization of $310
million of sub-prime equity mortgage loans. CHEC is also the servicer for the
mortgage loans included in the securitization. This securitization is a
continuation of CHEC's strategy to obtain regular access to public sources of
capital and liquidity and to continue to broaden the investor base for CHEC's
structured finance transactions. Since February 1998, CHEC has completed nine
securitizations totaling approximately $2.4 billion of sub-prime mortgage loans.
After the end of the quarter, CTX Mortgage announced it has established
a program to sell mortgage loans to Centex Home Mortgage, LLC (CHM), an
unaffiliated, special-purpose entity. CHM will hold the loans and CTX will
service them on an interim basis until they are sold or securitized. CHM may
hold up to $1.5 billion of home mortgages at any one time. This program, the
first for home mortgages, will enable CTX to originate loans without having to
rely on external borrowings or cash from Centex Corporation. This substantial
reduction in CTX's need for short-term funding will be reflected on Centex's
balance sheet as of March 31, 2000.
OUTLOOK
Thus far, rising interest rates have had minimal impact on home sales,
which continue to be strong. However, the escalating rates are expected to
continue to negatively impact the Company's Financial Services results and these
results will also be affected by the change in CHEC's method of accounting to
the "Portfolio Method."
Contracting and Construction Services and Centex Construction Products
are positioned to record superior performances during the current fiscal year.
Despite interest rate concerns, Centex should have another excellent year in
fiscal 2001.
FORWARD LOOKING STATEMENTS. THIS NEWS RELEASE CONTAINS FORWARD LOOKING
STATEMENTS WITHIN THE MEANING OF THE SECURITIES ACT OF 1933, SECTION 21E OF THE
SECURITIES EXCHANGE ACT OF 1934 AND THE REFORM LITIGATION REFORM ACT OF 1995.
THE STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE A NUMBER OF
RISKS AND UNCERTAINTIES THAT MAY CAUSE ACTUAL RESULTS AND OUTCOMES TO DIFFER
MATERIALLY FROM WHAT IS EXPRESSED IN SUCH STATEMENTS. THE PRINCIPAL RISKS AND
UNCERTAINTIES THAT MAY AFFECT THE COMPANY'S ACTUAL PERFORMANCE AND RESULTS OF
OPERATIONS INCLUDE WITHOUT LIMITATION GENERAL ECONOMIC CONDITIONS AND INTEREST
RATES; COMPETITIVE FACTORS; AND BUILDING MATERIALS COSTS. PLEASE SEE THE
COMPANY'S MOST RECENT REPORTS ON FORM 10-K AND FORM 10-Q FOR A MORE
COMPREHENSIVE LIST OF RISKS AND UNCERTAINTIES AFFECTING THE COMPANY'S ACTUAL
PERFORMANCE AND RESULTS OF OPERATIONS.
# # # # # # #
(MORE)
<PAGE> 7
CENTEX REPORTS FOURTH QUARTER AND FISCAL 2000 RESULTS, PAGE 7 OF 7
NOTE ATTACHMENTS:
- -----------------
(1) Summary of Consolidated Earnings
(2) Revenues and Earnings by Lines of Business (Quarter)
(3) Revenues and Earnings by Lines of Business (Year)
(4) Housing Activity by Geographic Area
(5) Supplemental Home Building Data
(6) Supplemental Financial Services Data
(7) Supplemental Construction Products Data
(8) Conventional Home Building Margins by Quarter (Fiscal 2000)
FOR ADDITIONAL INFORMATION, CONTACT AT (214) 981-5000:
- ------------------------------------------------------
Laurence E. Hirsch
Chairman and Chief Executive Officer
Sheila E. Gallagher
Vice President - Corporate Communications
(MORE)
<PAGE> 8
Attachment 1
Centex Corporation and Subsidiaries
Summary of Consolidated Earnings
(unaudited)
(dollar amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Quarter Ended
March 31,
-----------------------------------------
2000 1999 Change
----------- ----------- ------------
<S> <C> <C> <C>
Revenues $ 1,725,529 $ 1,545,066 12%
Earnings Before Income Taxes $ 114,691 $ 111,572 3%
Net Earnings $ 70,025 $ 68,195 3%
Earnings Per Share:
Basic $ 1.18 $ 1.15 3%
Diluted $ 1.17 $ 1.10 6%
Average Shares Outstanding:
Basic 59,120,730 59,463,751 (1)%
Diluted 60,100,560 61,749,414 (3)%
</TABLE>
<TABLE>
<CAPTION>
Year Ended
March 31,
-----------------------------------------
2000 1999 Change
----------- ----------- ------------
<S> <C> <C> <C>
Revenues $ 5,956,366 $ 5,154,840 16%
Earnings Before Income Taxes $ 416,861 $ 373,294 12%
Net Earnings $ 257,132 $ 231,962 11%
Earnings Per Share:
Basic $ 4.34 $ 3.90 11%
Diluted $ 4.22 $ 3.75 13%
Average Shares Outstanding:
Basic 59,308,158 59,488,701 -%
Diluted 60,928,980 61,853,817 (1)%
</TABLE>
<PAGE> 9
Attachment 2
Centex Corporation and Subsidiaries
Revenues and Earnings by Lines of Business
(dollars in thousands)
<TABLE>
<CAPTION>
Quarter Ended
March 31,
----------------------------------------------
2000 1999 Change
----------- ----------- ---------
<S> <C> <C> <C>
REVENUES
Home Building:
Conventional Homes $ 1,225,311 $ 937,856 31%
Manufactured Homes 37,548 47,808 (21)%
----------- -----------
Total Home Building 1,262,859 985,664 28%
73% 64%
Investment Real Estate 3,571 16,215 (78)%
--% 1%
Financial Services 86,679 112,166 (23)%
5% 7%
Construction Products 95,304 79,588 20%
6% 5%
Contracting and Construction Services 277,116 351,433 (21)%
16% 23%
----------- -----------
Total $ 1,725,529 $ 1,545,066 12%
100% 100%
=========== ===========
OPERATING EARNINGS
Home Building:
Conventional Homes $ 120,542 $ 91,250 32%
Manufactured Homes 518 2,021 (74)%
----------- -----------
Total Home Building 121,060 93,271 30%
84% 70%
Investment Real Estate 6,035 7,189 (16)%
4% 5%
Financial Services (A) (9,922) 20,684 (148)%
(7)% 16%
Construction Products 22,947 15,968 44%
16% 12%
Contracting and Construction Services 6,001 3,805 58%
4% 3%
Other, net (1,220) (8,019) 85%
(1)% (6)%
----------- -----------
Total Operating Earnings 144,901 132,898 9%
100% 100%
Corporate General Expenses (9,194) (8,909)
Interest Expense (21,016) (12,417)
----------- -----------
EARNINGS BEFORE INCOME TAXES $ 114,691 $ 111,572 3%
=========== ===========
</TABLE>
(A) During the quarter, as a result of increased current and projected interest
rates, the Company re-evaluated the discount rate used to value future cash
flows from its "Gain on Sale" loan securitizations and increased it from 12% to
15%. The discount rate increase resulted in a $16 million reduction in CHEC's
earnings for the quarter ended March 31, 2000. In addition, effective as of
March 31, 2000, Centex concluded that the long-term benefits of converting to
the "Portfolio" method of reporting Centex Home Equity Corporation's ("CHEC")
operations significantly outweighed the short-term benefit of higher earnings
under the "Gain on Sale" method previously used for its mortgage loan
securitizations.
<PAGE> 10
Attachment 3
Centex Corporation and Subsidiaries
Revenues and Earnings by Lines of Business
(dollars in thousands)
<TABLE>
<CAPTION>
Year Ended
March 31,
-----------------------------------------------
2000 1999 Change
----------- ----------- ------------
<S> <C> <C> <C>
REVENUES
Home Building:
Conventional Homes $ 3,686,844 $ 2,819,442 31%
Manufactured Homes 183,526 178,556 3%
----------- -----------
Total Home Building 3,870,370 2,997,998 29%
65% 58%
Investment Real Estate 30,928 33,694 (8)%
1% 1%
Financial Services 430,611 436,299 (1)%
7% 8%
Construction Products 418,695 336,073 25%
7% 7%
Contracting and Construction Services 1,205,762 1,350,776 (11)%
20% 26%
----------- -----------
Total $ 5,956,366 $ 5,154,840 16%
100% 100%
=========== ===========
OPERATING EARNINGS
Home Building:
Conventional Homes $ 323,220 $ 242,223 33%
Manufactured Homes(A) 7,329 10,253 (29)%
----------- -----------
Total Home Building 330,549 252,476 31%
64% 57%
Investment Real Estate 30,122 29,420 2%
6% 7%
Financial Services 32,474 92,309 (65)%
6% 21%
Construction Products (A) 104,853 69,189 52%
20% 16%
Contracting and Construction Services 23,471 15,209 54%
5% 3%
Other, net (4,749) (15,624) 70%
(1)% (4)%
----------- -----------
Total Operating Earnings 516,720 442,979 17%
100% 100%
Corporate General Expenses (33,015) (28,104)
Interest Expense (66,844) (41,581)
----------- -----------
EARNINGS BEFORE INCOME TAXES $ 416,861 $ 373,294 12%
=========== ===========
</TABLE>
(A) Operating earnings for Manufactured Homes and Construction Products are
reflected in this summary net of their respective minority interests. Operating
earnings related to those minority interests were $1,014 in 2000 and $2,492 in
1999 for Manufactured Homes and $63,758 in 2000 and $51,121 in 1999 for
Construction Products.The Manufactured Homes minority interest was purchased
during the quarter ended December 31, 1999.
<PAGE> 11
Attachment 4
Centex Corporation and Subsidiaries
Housing Activity by Geographic Area
<TABLE>
<CAPTION>
Closings
---------------------------------------------------------
Quarter Ended March 31, Year Ended March 31,
--------------------------- ----------------------------
2000 1999 Change 2000 1999 Change
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
West 1,375 984 40% 3,917 3,060 28%
Midwest 949 673 41% 3,089 2,062 50%
East 1,181 1,070 10% 4,134 3,309 25%
Southeast 1,057 864 22% 3,066 2,582 19%
Southwest 1,488 1,151 29% 4,698 3,779 24%
------ ------ ------ ------
6,050 4,742 28% 18,904 14,792 28%
====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
Sales (Orders) Backlog
-----------------------------------------
3/31/00 3/31/99 Change
----------- ----------- ----------
<S> <C> <C> <C>
West 1,099 921 19%
Midwest 1,628 1,355 20%
East 1,519 1,392 9%
Southeast 1,582 1,500 5%
Southwest 1,751 1,624 8%
----------- -----------
7,579 6,792 12%
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
Sales (Orders)
--------------------------------------------------------
Quarter Ended March 31, Year Ended March 31,
-------------------------- ---------------------------
2000 1999 Change 2000 1999 Change
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
West 1,371 997 38% 3,966 2,990 33%
Midwest 1,031 890 16% 3,207 2,515 28%
East 1,354 1,108 22% 4,261 3,466 23%
Southeast 1,014 955 6% 3,148 2,950 7%
Southwest 1,446 1,165 24% 4,825 4,010 20%
------ ------ ------ ------
6,216 5,115 22% 19,407 15,931 22%
====== ====== ====== ======
</TABLE>
<PAGE> 12
Attachment 5
Centex Corporation and Subsidiaries
Supplemental Home Building Data
CONVENTIONAL HOMES RESULTS
(dollars in millions, except per unit data)
<TABLE>
<CAPTION>
Quarter Ended March 31, Year Ended March 31,
--------------------------------------------- --------------------------------------------
2000 1999 2000 1999
-------------------- -------------------- -------------------- ---------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Conventional Housing Revenues $ 1,225.3 100.0% $ 937.8 100.0% $ 3,686.8 100.0% $ 2,819.4 100.0%
Cost of Sales (953.4) (77.8)% (730.4) (77.9)% (2,852.3) (77.3)% (2,194.7) (77.8)%
Selling, General & Administrative (151.4) (12.4)% (116.2) (12.4)% (511.3) (13.9)% (382.5) (13.6)%
---------- ------- ---------- ------- ---------- ------- ---------- -------
OPERATING EARNINGS $ 120.5 9.8% $ 91.2 9.7% $ 323.2 8.8% $ 242.2 8.6%
========== ======= ========== ======= ========== ======= ========== =======
Units Closed 6,050 4,742 18,904 14,792
Unit Sales Price $ 197,884 $ 188,963 $ 191,568 $ 185,668
% Change 4.7% 1.0% 3.2% 1.3%
Operating Earnings per Unit $ 19,924 $ 19,243 $ 17,098 $ 16,375
% Change 3.5% 20.4% 4.4% 19.2%
</TABLE>
MANUFACTURED HOMES RESULTS
(dollars in thousands)
<TABLE>
<CAPTION>
Quarter Ended March 31, Year Ended March 31,
------------------------------------------ ----------------------------------------
2000 1999 2000 1999
------------------- ------------------ ------------------ -------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Manufactured Homes Revenues (Construction) $ 22,930 100.0% $ 36,135 100.0% $ 121,015 100.0% $ 137,710 100.0%
Cost of Sales (17,923) (78.2)% (28,695) (79.4)% (94,057) (77.7)% (108,265) (78.6)%
Selling, General & Administrative (3,125) (13.6)% (3,858) (10.7)% (13,947) (11.5)% (13,486) (9.8)%
--------- ------- -------- ------- ---------- ------ ---------- ------
1,882 8.2% 3,582 9.9% 13,011 10.8% 15,959 11.6%
--------- ======= -------- ======= ---------- ====== ---------- ======
Manufactured Homes Revenues (Retail) 14,618 100.0% 11,673 100.0% 62,511 100.0% 40,846 100.0%
Cost of Sales (11,621) (79.5)% (8,292) (71.0)% (49,638) (79.4)% (29,992) (73.4)%
Selling, General & Administrative (3,503) (24.0)% (3,511) (30.1)% (14,126) (22.6)% (10,726) (26.3)%
--------- ------- -------- ------- ---------- ------ ---------- ------
(506) (3.5)% (130) (1.1)% (1,253) (2.0)% 128 0.3%
--------- ======= -------- ======= ---------- ====== ---------- ======
Construction and Retail Earnings 1,376 3,452 11,758 16,087
Goodwill Amortization (858) (933) (3,415) (3,342)
Minority Interest Expense -- (498) (1,014) (2,492)
--------- -------- ---------- ----------
GROUP OPERATING EARNINGS $ 518 $ 2,021 $ 7,329 $ 10,253
========= ======== ========== ==========
UNITS
Units Produced 1,265 1,605 5,686 6,275
Units Sold - Retail 380 280 1,492 976
Less: Intersegment Sales (418) (225) (1,228) (811)
--------- -------- ---------- ----------
UNITS SOLD 1,227 1,660 5,950 6,440
========= ======== ========== ==========
</TABLE>
<PAGE> 13
Attachment 6
Centex Corporation and Subsidiaries
Supplemental Financial Services Data
CTX MORTGAGE COMPANY
<TABLE>
<CAPTION>
Quarter Ended March 31, Year Ended March 31,
-------------------------------- --------------------------------
2000 1999 Change 2000 1999 Change
-------- -------- ------ -------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
Originations
Builder 3,469 3,154 10% 10,958 9,882 11%
Retail 9,554 15,046 (37)% 49,404 66,496 (26)%
-------- -------- -------- --------
Total 13,023 18,200 (28)% 60,362 76,378 (21)%
======== ======== ======== ========
Applications
Builder 3,604 3,242 11% 11,724 10,937 7%
Retail 11,280 16,513 (32)% 47,370 67,189 (29)%
-------- -------- -------- --------
Total 14,884 19,755 (25)% 59,094 78,126 (24)%
======== ======== ======== ========
Loan Volume (in billions) $ 1.80 $ 2.46 (27)% $ 8.14 $ 10.06 (19)%
======== ======== ======== ========
Average Loan Size $138,400 $134,900 3% $134,900 $131,700 2%
======== ======== ======== ========
Profit per Loan $ 258 $ 1,047 (75)% $ 562 $ 1,118 (50)%
======== ======== ======== ========
</TABLE>
CHEC (B & C)
<TABLE>
<CAPTION>
Quarter Ended March 31, Year Ended March 31,
------------------------------------- --------------------------------------
2000 1999 Change 2000 1999 Change
---------- ---------- ------ ---------- ---------- ------
<S> <C> <C> <C> <C> <C> <C>
Originations 5,331 4,241 26% 20,568 15,582 32%
========== ========== ========== ==========
Applications 37,665 28,370 33% 127,450 82,803 54%
========== ========== ========== ==========
Loan Volume (in billions) $ 0.33 $ 0.28 17% $ 1.32 $ 1.02 29%
========== ========== ========== ==========
Average Loan Size $ 61,700 $ 65,900 (6)% $ 64,100 $ 65,200 (2)%
========== ========== ========== ==========
Profit per Loan:
Before Discount Rate Adjustment $ 700 $ 617 13% $ 911 $ 620 47%
Discount Rate Adjustment (A) (3,001) -- (778) --
---------- ---------- ---------- ----------
Total $ (2,301) $ 617 (473)% $ 133 $ 620 (79)%
========== ========== ========== ==========
</TABLE>
(A) During the quarter, as a result of increased current and projected interest
rates, the Company re-evaluated the discount rate used to value future cash
flows from its "Gain on Sale" loan securitizations and increased it from 12% to
15%. The discount rate increase resulted in a $16 million reduction in CHEC's
earnings for the quarter ended March 31, 2000. In addition, effective as of
March 31, 2000, Centex concluded that the long-term benefits of converting to
the "Portfolio" method of reporting Centex Home Equity Corporation's ("CHEC")
operations significantly outweighed the short-term benefit of higher earnings
under the "Gain on Sale" method previously used for its mortgage loan
securitizations.
<PAGE> 14
Attachment 7
Centex Corporation and Subsidiaries
SUPPLEMENTAL CONSTRUCTION PRODUCTS DATA
(volumes in thousands, except Gypsum Wallboard)
<TABLE>
<CAPTION>
Quarter Ended March 31, Year Ended March 31,
---------------------------------- ----------------------------------
2000 1999 Change 2000 1999 Change
--------- --------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Cement
Sales Volumes (Tons) 459 447 3% 2,295 2,218 3%
Average Net Sales Price $ 67.40 $ 68.13 (1)% $ 69.25 $ 68.75 1%
Gypsum Wallboard
Sales Volumes (MMSF) 369 295 25% 1,363 1,155 18%
Average Net Sales Price $ 144.71 $ 133.04 9% $ 153.57 $ 122.55 25%
Concrete
Sales Volumes (Cubic Yards) 177 168 5% 788 706 12%
Average Net Sales Price $ 51.70 $ 50.22 3% $ 52.07 $ 49.78 5%
Aggregates
Sales Volumes (Tons) 717 655 9% 3,368 2,916 16%
Average Net Sales Price $ 4.25 $ 4.01 6% $ 4.29 $ 4.02 7%
</TABLE>
SUPPLEMENTAL CONTRACTING AND CONSTRUCTION SERVICES DATA
(dollars in millions)
<TABLE>
<CAPTION>
Quarter Ended March 31, Year Ended March 31,
------------------------- ---------------------------
2000 1999 Change 2000 1999 Change
------ ------ ------ ------ ------- ------
<S> <C> <C> <C> <C> <C> <C>
New Contracts $ 337 $ 106 218% $1,651 $1,128 46%
====== ====== ====== ======
Backlog at March 31, $1,382 $ 937 47% $1,382 $ 937 47%
====== ====== ====== ======
</TABLE>
<PAGE> 15
Attachment 8
Centex Corporation and Subsidiaries
Home Building Margins - Quarterly Summary
<TABLE>
<CAPTION>
For the Quarters Ending,
--------------------------------------------------------------------------- Fiscal Year Total
June 30, 1999 September 30, 1999 December 31, 1999 March 31, 2000 March 31, 2000
---------------- ------------------ ----------------- ---------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Conventional Housing Revenues $ 754.6 100.0% $ 843.7 100.0% $ 863.2 100.0% $1,225.3 100.0% $ 3,686.8 100.0%
Cost of Sales (581.3) (77.0)% (651.1) (77.2)% (666.6) (77.2)% (953.4) (77.8)% (2,852.3) (77.3)%
-------- ----- -------- ----- ------- ----- -------- ----- --------- -----
GROSS MARGIN 173.3 23.0% 192.6 22.8% 196.6 22.8% 271.9 22.2% 834.5 22.7%
Selling, General & Administrative (114.2) (15.2)% (122.4) (14.5)% (123.3) (14.3)% (151.4) (12.4)% (511.3) (13.9)%
-------- ----- -------- ----- ------- ----- -------- ----- --------- -----
OPERATING EARNINGS $ 59.1 7.8% $ 70.2 8.3% $ 73.3 8.5% $ 120.5 9.8% $ 323.2 8.8%
======== ===== ======== ===== ======= ===== ======== ===== ========= =====
Units Closed 3,934 4,425 4,495 6,050 18,904
Unit Sales Price $188,608 $187,700 $189,466 $197,884 $ 191,568
% Change - Prior Year 2.3% 1.7% 3.2% 4.7% 3.2%
OPERATING EARNINGS/UNIT $ 15,035 $ 15,864 $ 16,314 $ 19,924 $ 17,098
% Change - Prior Year 10.2% 5.4% 1.1% 3.5% 4.4%
GROSS MARGIN PER UNIT $ 44,052 $ 43,525 $ 43,737 $ 44,942 $ 44,144
% Change - Prior Year 7.4% 5.9% 3.3% 2.8% 6.3%
SG&A Per Unit $ 29,029 $ 27,661 $ 27,430 $ 25,025 $ 27,047
% Change - Prior Year 6.1% 6.2% 4.6% 2.1% 9.3%
</TABLE>
