<PAGE> 1
The information in this Prospectus Supplement and the attached Prospectus
is not complete and may be changed. A registration statement relating to
these securities has been declared effective by the Securities and
Exchange Commission. We are not using this Prospectus Supplement and the
attached Prospectus to offer to sell these securities or to solicit offers
to buy these securities in any place where the offer or sale is not
permitted.
Filed Pursuant to Rule 424b(3)
Registration No. 333-94221
SUBJECT TO COMPLETION, DATED MAY 31, 2000
Prospectus Supplement to Prospectus dated January 24, 2000
$
CENTEX CORPORATION [LOGO]
% NOTES DUE 20
MATURITY
- The Notes will mature on , 20 .
INTEREST
- Interest on the Notes is payable on and of each year,
beginning , 2000.
- Interest on the Notes will accrue from , 2000.
REDEMPTION
- We may redeem some or all of the Notes at any time. The redemption prices are
described at page S-12.
- There is no sinking fund for the Notes.
RANKING
- The Notes are unsecured.
- The Notes rank equally with all of our other unsecured and unsubordinated
debt.
LISTING
- We do not intend to list the Notes on any securities exchange.
CENTEX
- Our principal office is located at 2728 North Harwood Street, Dallas, Texas
75201. Our telephone number is (214) 981-5000.
--------------------------------------------------------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE NOTES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE ATTACHED PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
PER NOTE TOTAL
-------------------------------------------------------------------------------------------------------
<S> <C> <C>
Initial Price to Public % $
Underwriting Discount % $
Proceeds to Us (Before Expenses) % $
-------------------------------------------------------------------------------------------------------
</TABLE>
Your purchase price will also include any interest that has accrued on the Notes
since , 2000.
--------------------------------------------------------------------------------
- The Notes will be delivered to you in global form through the book-entry
delivery system of The Depository Trust Company on or about , 2000.
- The underwriters listed below will purchase the Notes from us on a firm
commitment basis and offer them to you, subject to certain conditions.
CHASE SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
SALOMON SMITH BARNEY
--------------------------------------------------------------------------------
The date of this Prospectus Supplement is , 2000.
<PAGE> 2
ABOUT THIS PROSPECTUS
In making your investment decision, you should rely on the
information contained or incorporated by reference in this prospectus supplement
and the attached prospectus. We have not authorized anyone to provide you with
any other information. If you receive any unauthorized information, you must not
rely on it.
We are offering to sell the Notes only in places where sales
are permitted.
You should not assume that the information contained or
incorporated by reference in this prospectus supplement or the attached
prospectus is accurate as of any date other than its respective date.
We have filed our joint annual report on Form 10-K for our
fiscal year ended March 31, 2000. You can obtain this report by following the
instructions we provide under "Where You Can Find More Information" on page 2 of
the attached prospectus.
------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Centex.......................................................................S-3
Use of Proceeds..............................................................S-7
Selected Financial Data......................................................S-8
Description of Notes........................................................S-11
Underwriting................................................................S-17
Legal Opinions..............................................................S-18
PROSPECTUS
About This Prospectus..........................................................1
Centex.........................................................................1
Where You Can Find More Information............................................2
A Warning About Forward-Looking Statements.....................................2
Use of Proceeds................................................................3
Summary of Selected Financial Data.............................................3
Description of Debt Securities.................................................5
Plan of Distribution..........................................................13
Legal Opinions................................................................14
Experts.......................................................................14
</TABLE>
S-2
<PAGE> 3
CENTEX
Through its various subsidiaries, Centex Corporation is one of
the nation's largest home builders and general building contractors. We also
provide retail mortgage lending services through various financial services
subsidiaries. We currently operate in five principal business segments. Our
principal business segments and each segment's percentage contribution to total
operating earnings in the fiscal years ended March 31, 2000 and 1999 are set
forth in the table below.
<TABLE>
<CAPTION>
FISCAL YEARS ENDED
MARCH 31,
----------------------
SEGMENT 2000 1999
------- ---- ----
<S> <C> <C>
Home Building ................................ 64% 57%
Investment Real Estate ....................... 6% 7%
Financial Services ........................... 6% 21%
Construction Products ........................ 20% 16%
Contracting and Construction Services ........ 5% 3%
</TABLE>
This table does not reflect the effect of corporate general
and administrative expenses and, accordingly, the percentages shown total to
more than 100%. Corporate general and administrative expenses, which represent
salaries and other costs not identifiable with a specific segment, and new
business initiatives and other businesses that are not mature enough to stand
alone as separate business segments negatively impacted operating earnings by
(1%) and (4%) in fiscal 2000 and 1999, respectively.
Our principal business segments, especially our Home Building
operation, are cyclical and are particularly affected by changes in local
economic conditions and in long-term and short-term interest rates. We attempt
to mitigate certain of these risks by diversifying into multiple industries and
operating in numerous geographic regions. Recently announced increases in
interest rates have thus far had a minimal impact on home sales, but we can give
you no assurances that this will continue to be the case. Escalating interest
rates are expected to continue to negatively impact our Financial Services
operations.
HOME BUILDING
CONVENTIONAL HOMES
Our conventional Home Building operation, Centex Homes, is
primarily involved in the purchase and development of land or lots and the
construction and sale of single-family homes, town homes and low-rise
condominiums. Our conventional Home Building operation accounted for 98% and 96%
of total Home Building operating earnings in fiscal 2000 and 1999, respectively,
and our Manufactured Homes business described below accounted for the remainder.
Centex Homes is one of the leading U.S. builders of single-family detached
homes, as measured by the number of units sold and closed in a calendar year.
Centex Homes is also the only company to rank among the nation's top 10 home
builders for each of the past 30 years according to Professional Builder
magazine. We sell to both first-time and move-up buyers. Approximately 89% of
the houses we sell are single-family detached homes and the remainder are town
homes and low-rise condominiums.
We follow a strategy of seeking to reduce exposure to local
market volatility by spreading our home building operations across
geographically and economically diverse markets. We are currently involved in
operations in 439 neighborhoods in 77 different markets located in 20 states. In
fiscal 2000, Centex Homes closed sales of 18,904 houses, including first-time,
move-up and, in some markets, custom homes, ranging in price from approximately
$37,000 to about $1.3 million, with the average sale price being approximately
$191,568. Our sales (orders) backlog in units at the end of fiscal 2000 and 1999
was 7,579 and 6,792, respectively.
S-3
<PAGE> 4
Summarized below by geographic area are our home closings for
each of the fiscal years in the five-year period ended March 31, 2000.
<TABLE>
<CAPTION>
FOR FISCAL YEARS ENDED MARCH 31,
-------------------------------------------------------------------
2000 1999 1998 1997 1996
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
CLOSINGS (IN UNITS):
West .................... 3,917 3,060 2,964 2,955 2,347
Midwest ................. 3,089 2,062 1,147 1,337 1,276
East .................... 4,134 3,309 2,650 2,875 2,804
Southeast ............... 3,066 2,582 2,400 2,334 2,241
Southwest ............... 4,698 3,779 3,257 3,606 3,302
------- ------- ------- ------- -------
Total .......... 18,904 14,792 12,418 13,107 11,970
======= ======= ======= ======= =======
AVERAGE SALES PRICE
(IN THOUSANDS) .......... $ 192 $ 186 $ 183 $ 172 $ 164
======= ======= ======= ======= =======
</TABLE>
Our policy has been to acquire land with the intent to
complete the sale of housing units within approximately 24 to 36 months from the
date of acquisition. Generally this involves acquiring land that is properly
zoned and is either ready for development or, to some degree, already developed.
We have acquired a substantial amount of our finished and partially improved
lots and land under option agreements that are exercised over specific time
periods or, in certain cases, as the lots are needed. The purchase of finished
lots generally allows us to shorten the lead time to commence construction and
reduces the risks of unforeseen improvement costs and volatile market
conditions.
MANUFACTURED HOMES
In fiscal 1997, we entered the Manufactured Homes business
when we acquired approximately 80% of the predecessor of Cavco Industries, LLC,
a producer of manufactured and park model homes. In the fourth quarter of fiscal
2000, we purchased the remaining minority interest in Cavco Industries. In
fiscal 1998, we purchased substantially all of the assets of AAA Homes, Inc.,
Arizona's largest manufactured homes retailer, marking our entry into the
retailing of manufactured homes. At present, our Manufactured Homes operations
include the manufacture of quality residential and park model homes and their
sale through company-owned retail outlets and a network of independent dealers.
We are the largest producer of manufactured homes in Arizona
and New Mexico, as well as the nation's largest producer of park model homes,
having built 5,686 manufactured housing units during fiscal 2000. We operate
five manufacturing plants: three in the Phoenix, Arizona area, one near
Albuquerque, New Mexico, and one plant in central Texas that opened in January
1999.
INVESTMENT REAL ESTATE
Investment Real Estate operations involve the acquisition,
development and sale of land, and the development of industrial, office, retail
and other commercial projects and apartment complexes. As of March 31, 2000, our
property portfolio consisted of land located in eight states: Texas, New Jersey,
Florida, North Carolina, California, Tennessee, Virginia and Colorado. At March
31, 2000, we also owned either directly, through interests in joint ventures, or
through a limited partner interest in Centex Development Company, L.P., two
multi-family communities totaling 572 units located in Grand Prairie and College
Station, Texas, as well as 1,166,000 square feet of industrial, office and
retail buildings in California, Arizona, Texas, Florida, North Carolina and
Massachusetts. During fiscal 2000, Centex Development Company, L.P. began
construction on a 382-unit apartment complex in St. Petersburg, Florida and
500,000 square feet of industrial and office space located in Florida,
California, Texas and North Carolina. All of the projects under construction at
March 31, 2000 are scheduled for completion during fiscal 2001. Many of the
areas targeted for development include land owned by us or our affiliates.
S-4
<PAGE> 5
FINANCIAL SERVICES
Through our Financial Services operations, we offer financing
of conventional homes, home equity and sub-prime mortgage lending and the sale
of title and other insurance coverages. These activities include mortgage
origination and other related services for homes sold by our subsidiaries and by
others.
MORTGAGE BANKING
We established CTX Mortgage Company in 1973 to provide
mortgage financing for homes built by Centex Homes. Our opening of CTX Mortgage
offices in substantially all of Centex Homes' housing markets has enabled us to
provide mortgage financing for an average of 72% of the homes built by Centex
Homes over the past five years. However, this capture rate fell to 61% of Centex
Homes' sales in fiscal 2000 principally because of home builder expansion into
geographic markets where CTX Mortgage had not yet established operations. In
1985, we expanded our operations to include mortgage loans that are not
associated with the sale of homes built by us. At March 31, 2000, we had 221 CTX
Mortgage offices located in 37 states.
We provide mortgage origination and other mortgage-related
services for Federal Housing Administration, Department of Veterans' Affairs and
conventional loans on homes built and sold by us or by others and on resale
homes. Our loans are generally first-lien mortgages secured by one-to
four-family residences. A majority of the conventional loans qualify for
inclusion in guaranteed programs sponsored by the Federal National Mortgage
Association ("Fannie Mae") or the Federal Home Loan Mortgage Corporation. Such
loans are known in the industry as "conforming" loans. The remainder of the
loans are either pre-approved and individually underwritten by CTX Mortgage or
private investors who subsequently purchase the loans on a whole-loan basis or
are funded by private investors who pay a broker fee to CTX Mortgage for
referring a loan.
We originate our conventional and government mortgage loans
with the intention of selling or securitizing the mortgage loans and selling the
related servicing rights. As interim servicer, we do not retain mortgage
servicing rights after the sale or securitization of the related mortgage loan.
Most of the mortgage loans originated by us are sold and the servicing is
transferred before the second installment is due from the borrower. In
connection with our role as interim servicer, we provide collection efforts
relating to early payment defaults, as well as quality control audits to ensure
the proper documentation necessary to pool and sell mortgages.
During the third quarter of fiscal 2000, CTX Mortgage entered
into a mortgage loan purchase agreement with Centex Home Mortgage, LLC, an
unaffiliated special purpose Delaware limited liability company which is
hereinafter referred to as "CHM", pursuant to which CHM committed to purchase
mortgage loans from CTX Mortgage on a revolving basis, up to CHM's asset limit
of $1.5 billion. Pursuant to this agreement, CTX Mortgage sells to CHM
substantially all of the conforming, Jumbo "A" and Government National Mortgage
Association eligible mortgage loans originated by CTX Mortgage. CTX Mortgage, on
behalf of CHM, arranges for the sale or securitization into the secondary market
of the mortgage loans purchased by CHM. CTX Mortgage also services the loans on
an interim basis until they are sold or securitized. As of March 31, 2000, CTX
Mortgage was servicing approximately $704 million of mortgage loans owned by
CHM. See "Description of Debt Securities - Specific Characteristics of Our Debt
Securities - Senior Debt Securities" in the prospectus for more information
regarding CHM.
CTX Mortgage enters into various financial agreements, in the
normal course of business, in order to manage the exposure to changing interests
rates as a result of having issued loan commitments to its borrowers at a
specified price and for a specified period of time. CTX Mortgage, through its
centralized secondary marketing department, generally sells all mortgages for
future delivery at a specified price at the time the borrower locks its interest
rate option, thereby mitigating the risk of a decline in the value of the
mortgages prior to their ultimate delivery. CTX Mortgage utilizes these forward
sale commitments to mitigate the risk of reductions in value of the mortgage
loans sold to CHM and mortgage loans financed under CTX Mortgage's credit
facilities.
HOME EQUITY AND SUB-PRIME MORTGAGE LENDING
Our Home Equity operation is a Fannie Mae approved sub-prime
mortgage lender formed in fiscal 1995 to engage in the origination of primarily
non-conforming home equity loans. The sub-prime lending market is
S-5
<PAGE> 6
comprised of borrowers whose financing needs are not being met by traditional
mortgage lenders for a variety of reasons, including credit histories that may
limit the borrower's access to credit or the borrower's need for specialized
loan products. Since its inception, Home Equity has focused on lending to
individuals who have substantial equity in their homes but have impaired or
limited credit histories.
At March 31, 2000, we had 138 Home Equity offices doing
business in 48 states. Home Equity originates home equity loans through four
major origination sources: (1) retail branch network, (2) broker referral
network, (3) referrals from its affiliated conforming mortgage company, CTX
Mortgage, and (4) Home Equity's direct sales unit, which sources loans through
telemarketing and direct mail efforts.
We began servicing home equity loans in fiscal 1997. In
connection with our role as loan servicer, we bill and collect loan payments
when due, provide customer help and provide collection efforts relating to
delinquent payments, including instituting foreclosure proceedings and
liquidating underlying collateral. As of March 31, 2000, Home Equity was
servicing a loan portfolio of approximately $2.1 billion.
Most of our home equity loans are originated with the
intention of securitizing the loans where we continue to service the loans for a
fee. The home equity loans that are not securitized are either sold by us to
investors on a whole-loan basis or retained and serviced by us as portfolio
loans. Currently, we do retain mortgage servicing rights on loans sold by us on
a whole-loan basis.
Home Equity uses treasury lock agreements and interest rate
swap agreements to hedge the market risk associated with carrying its inventory
of sub-prime mortgage loans held for sale or securitization. Home Equity will
generally hold mortgage loans in anticipation of securitization for up to 120
days.
Securitizations completed by Home Equity prior to March 31,
2000 were structured in a manner that caused them to be accounted for as sales,
and the resulting gains on such sales were reported in Home Equity's operating
results during the period in which the securitization was completed. We have
concluded that the long-term benefits of converting to the "portfolio" method to
report Home Equity's operating results significantly outweigh the short-term
benefit of higher earnings under the "gain on sale" method previously used for
Home Equity's mortgage loan securitizations. Accordingly, effective as of March
31, 2000, Home Equity has elected to structure all of its future loan
securitizations in a manner that will result in the utilization of the
"portfolio" method for reporting its operating results. This change will have no
effect on the profit recognized over the life of each mortgage loan. Rather, the
change will merely affect the timing of profit recognition. We expect that the
change will negatively impact our Home Equity operating results in fiscal 2001.
OTHER FINANCIAL SERVICES OPERATIONS
Our title insurance operations operate principally in Texas,
Florida, Virginia, California and Maryland. We sell homeowners and hazard
insurance to our and other home building customers through Westwood Insurance, a
multi-line insurance broker acquired by us in fiscal 1999 that specializes in
writing insurance for the home building industry. In addition to ourselves and
commercial loan lenders, Westwood serves approximately 228 other home builders
in 45 states.
CONSTRUCTION PRODUCTS
Through our Construction Products operations, we manufacture
cement, gypsum wallboard and readymix concrete for distribution and sale. In
April 1994, our construction products subsidiary, Centex Construction Products,
Inc., completed an initial public offering of 51% of its common stock.
Principally as a result of stock repurchases by Centex Construction Products,
our ownership interest in Centex Construction Products has increased to 64.4% as
of March 31, 2000.
S-6
<PAGE> 7
CEMENT
Construction Products operates cement plants in or near Buda,
Texas; LaSalle, Illinois; Fernley, Nevada; and Laramie, Wyoming. The plants in
Buda and LaSalle are owned by separate joint ventures in which Construction
Products has a 50% interest. All four of the cement plants are fuel-efficient
dry process plants.
Construction Products' net cement production, excluding the
joint venture partners' 50% interest in the Buda and LaSalle plants, totaled
approximately 2.0 million tons in both fiscal 2000 and 1999. Total net cement
sales were approximately 2.3 million tons in fiscal 2000 and 2.2 million tons in
fiscal 1999, as all four cement plants sold the entire product they produced.
GYPSUM WALLBOARD
Construction Products owns and operates three gypsum wallboard
manufacturing facilities, two located in Albuquerque and nearby Bernalillo, New
Mexico and one located in Gypsum, Colorado (near Vail). The principal sources of
demand for gypsum wallboard are residential and non-residential construction,
repair and remodeling.
READYMIX CONCRETE AND AGGREGATES
Construction Products' readymix concrete and aggregates
operations are located in and around Austin, Texas and northern California. The
10,000-acre aggregates deposit in northern California contains an estimated two
billion tons of reserves. Construction Products sells aggregates from this
deposit in the Sacramento, California area and in nearby counties.
CONTRACTING AND CONSTRUCTION SERVICES
Contracting and Construction Services activities involve the
construction of buildings for both private and government interests, including
hotels, office buildings, hospitals, correctional facilities, schools, shopping
centers, airports, parking garages, sport stadiums, military facilities, post
offices and convention and performing arts centers. Our contracting and
construction services work is performed through our construction group
nationwide. Centex Construction Group is made up of four firms with various
geographic locations and project niches. New contracts for the group for fiscal
2000 totaled $1.651 billion compared with $1.128 billion for fiscal 1999. The
backlog of uncompleted projects at March 31, 2000 was $1.382 billion, compared
with $937 million at March 31, 1999.
Construction contracts are primarily entered into under two
formats: competitively-bid or negotiated jobs. In a competitively-bid format,
the contractor will bid a fixed amount for which it will agree to construct the
project based on an evaluation of detailed plans and specifications. In a
negotiated job, the contractor bids a fee (fixed or percentage) over the cost of
the project and, in many instances, agrees that the final cost will not exceed a
designated amount. Such contracts may include a provision whereby the owner will
pay a part of any savings from the guaranteed amount to the contractor.
Historically, the majority of our projects have been in the higher risk
competitively-bid jobs. Recent years have seen a shift to higher-margin private
negotiated projects from the competitively-bid public projects. At March 31,
2000, approximately 85% of our outstanding projects were negotiated.
USE OF PROCEEDS
The net proceeds from the sale of the Notes will be used to
repay commercial paper borrowings and other short-term debt. As of March 31,
2000, we had $113,135,000 in outstanding commercial paper borrowings and other
short-term debt at a weighted average interest rate of 6.25%. Since that date,
we have experienced a significant increase in commercial paper borrowings and
other short-term debt, and we expect the amount of such borrowings and debt to
exceed the net proceeds from the sale of the Notes at the closing of this
offering. Commercial paper borrowings and other short-term debt are seasonal and
we generally use the proceeds from their issuance to finance our business,
including the continuing growth and development of our Home Building operations.
S-7
<PAGE> 8
SELECTED FINANCIAL DATA
In the table below we provide you with selected consolidated
financial information prepared based on our consolidated financial statements
for each of the fiscal years in the five-year period ended March 31, 2000, which
have been audited by Arthur Andersen LLP, independent public accountants. When
you read this selected historical consolidated financial data, you should also
read the historical financial statements and accompanying notes that we have
included in our joint annual report on Form 10-K for the year ended March 31,
2000. You can obtain this report by following the instructions we provide under
"Where You Can Find More Information" on page 2 of the attached prospectus.
Balance sheet information presented in the table below is as of the end of the
applicable period.
<TABLE>
<CAPTION>
FISCAL YEARS ENDED MARCH 31,
---------------------------------------------------------------------------
2000 1999 1998 1997 1996
----------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS, EXCEPT RATIOS
AND PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Revenues ......................................... $ 5,956,366 $ 5,154,840 $ 3,975,450 $ 3,784,991 $ 3,102,987
Net earnings ..................................... 257,132 231,962 144,806 106,563 53,365
Total assets ..................................... 4,038,740 4,334,746 3,416,219 2,678,829 2,336,966
Total long-term debt, consolidated ............... 751,160 284,299 237,715 236,769 321,002
Total debt, consolidated ......................... 1,313,395 1,910,899 1,390,588 864,287 983,269
Total debt (with financial services reflected
on the equity method) ................... 898,068 587,955 311,538 283,769 408,253
Deferred income tax (asset) liability ............ (49,907) (49,107) (147,607) (197,413) 16,620
Debt as a percentage of capitalization (1)
Total debt, consolidated ................ 45.1% 57.6% 53.1% 44.5% 57.1%
Total debt (with financial services
reflected on the equity method) ...... 36.0% 29.5% 20.3% 20.9% 35.6%
Stockholders' equity ............................. $ 1,419,349 $ 1,197,639 $ 991,172 $ 835,777 $ 722,836
Per common share:
Earnings per share - Basic .............. $ 4.34 $ 3.90 $ 2.45 $ 1.86 $ 0.94
Earnings per share - Diluted ............ $ 4.22 $ 3.75 $ 2.36 $ 1.80 $ 0.91
Other operating data:
Cash dividends per share ................ $ 0.16 $ 0.16 $ 0.135 $ 0.10 $ 0.10
Adjusted EBITDA (2) ..................... $ 500,202 $ 358,738 $ 259,157 $ 186,907 $ 123,992
Ratio of Adjusted EBITDA to interest
expense (2) (3) ....................... 7.48x 8.63x 7.79x 5.49x 3.03x
</TABLE>
(1) Capitalization is composed of total debt, deferred income tax
(asset) liability, negative goodwill, minority interest and
stockholders' equity.
(2) Adjusted EBITDA is defined as earnings before interest, taxes,
depreciation and amortization expense and, for the reasons
described under "Ratio of Earnings to Fixed Charges" below,
excludes our Financial Services operations. Adjusted EBITDA is
not intended to represent cash flow in accordance with
generally accepted accounting principles and does not
represent the measure of cash available for distribution.
Adjusted EBITDA is not intended as an alternative to net
earnings. For additional financial information that includes
and excludes our Financial Services operations, please see our
joint annual report on Form 10-K for the year ended March 31,
2000.
(3) Interest expense excludes interest expense attributable to our
Financial Services operations.
S-8
<PAGE> 9
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
FISCAL YEARS ENDED MARCH 31,
---------------------------------------------
2000 1999 1998 1997 1996
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Total enterprise ................................................ 4.52x 4.31x 4.16x 3.71x 1.82x
Centex (excluding Financial Services operations) ................ 6.96x 7.42x 6.83x 5.22x 1.99x
</TABLE>
These computations include Centex Corporation, and except as
otherwise noted, our subsidiaries, and 50% or less owned companies. For these
ratios, fixed charges include:
o interest on all debt and amortization of debt
discount and expense;
o capitalized interest; and
o an interest factor attributable to rentals.
Earnings include the following components:
o income from continuing operations before adjustment
for minority interests in consolidated subsidiaries
or income or loss from equity investments;
o fixed charges as defined above, but excluding
capitalized interest; and
o amortization of capitalized interest.
To calculate the ratio of earnings to fixed charges, excluding
our Financial Services operations, the applicable interest expense was deducted
from the fixed charges and the applicable earnings were deducted from the
earnings amount.
The computations in the tables above that exclude our
Financial Services operations are presented only to provide investors an
alternative method of measuring our ability to utilize adjusted EBITDA and
earnings to cover our interest expense or fixed charges. The principal reasons
why we present these computations that exclude our Financial Services operations
are as follows:
o the financial services subsidiaries operate in a
distinctly different financial environment that
generally requires significantly less equity to
support their higher debt levels compared to the
operations of our other subsidiaries;
o the financial services subsidiaries have structured
their financing programs substantially on a
stand-alone basis; and
o we have very limited obligations with respect to the
indebtedness of our financial services subsidiaries.
S-9
<PAGE> 10
OUTSTANDING INDEBTEDNESS
The following table sets forth our senior and subordinated
indebtedness (excluding indebtedness of our subsidiaries) as of March 31, 2000:
<TABLE>
<S> <C> <C>
Senior debt:
Medium-Term Note programs, 6.4% to 6.89% ........... $ 539,439,000
Debt to subsidiaries ............................... 219,100,000
Commercial paper borrowings and other
short-term debt ................................. 113,135,000
--------------
Total senior debt ............................................... $ 871,674,000
==============
Subordinated debt:
8.75% Subordinated Debentures due March 1, 2007 .... $ 99,521,000
7.375% Subordinated Debentures due June 1, 2005 .... 99,747,000
Convertible Subordinated Note due 2010 ............. 2,100,000
--------------
Total subordinated debt ......................................... $ 201,368,000
==============
Total debt ...................................................... $1,073,042,000
==============
</TABLE>
Since March 31, 2000, we have issued $85.0 million of senior
notes under our Medium-Term Note programs and substantially increased our
commercial paper borrowings. We expect the amount of commercial paper borrowings
and other short-term debt to exceed the net proceeds from the sale of the Notes
at the closing of this offering.
S-10
<PAGE> 11
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes
supplements the description of the general terms of the debt securities set
forth under the heading "Description of Debt Securities" in the attached
prospectus. If the descriptions are inconsistent, this prospectus supplement
controls. Capitalized terms used in this prospectus supplement that are not
otherwise defined will have the meanings given to them in the accompanying
prospectus. The following statements with respect to the Notes are summaries, do
not purport to be complete and are subject to, and qualified by reference to,
the provisions of the Notes and the Indenture.
GENERAL
We will issue the Notes as a separate series of debt
securities under the Indenture, dated as of October 1, 1998, between us and
Chase Bank of Texas, National Association, as Trustee. For a more complete
description of the Indenture, see "Description of Debt Securities" in the
attached prospectus. The Notes are unsecured and will rank equally with all of
our other unsecured and unsubordinated indebtedness. We will issue the Notes
with an aggregate principal amount of $ ,000,000.
The Notes will bear interest from , 2000, payable on
and of each year, commencing , 2000. Interest will be computed on the
basis of a 360-day year of twelve 30-day months. Interest will be payable
generally to the person in whose name the Note is registered at the close of
business on or next preceding the or interest payment date.
The Notes will mature on , 20 and will accrue interest at a rate of % per
annum.
The Notes will be issued in fully registered form only in
denominations of $1,000 and integral multiples of $1,000. We will initially
issue the Notes in global book-entry form. So long as the Notes are in
book-entry form, we will make payments on the Notes to the depository or its
nominee, as the registered owner of the Notes, by wire transfer of immediately
available funds. See "Book-Entry System."
Because we are a holding company that conducts all of our
operations through our subsidiaries, holders of our debt securities will
generally have a junior position to claims of creditors of our subsidiaries,
including trade creditors, debt holders, secured creditors, taxing authorities,
guarantee holders and any preferred stockholders. Certain of our operating
subsidiaries, principally our Financial Services operations, have ongoing
corporate debt programs used to finance their business activities. As of March
31, 2000, our subsidiaries had approximately $459 million of outstanding debt.
Moreover, our ability to pay principal and interest on the Notes is, to a large
extent, dependent upon our receiving dividends, interest or other amounts from
our subsidiaries. The Indenture under which the Notes are to be issued does not
contain any limitation on our ability to incur additional debt or on our
subsidiaries' ability to incur additional debt to us or to unaffiliated third
parties. In addition, we borrow funds from and lend funds to our subsidiaries
from time to time to manage our working capital needs. Our indebtedness to our
subsidiaries will rank equally in right of payment to the Notes.
The Indenture does not limit the amount of debt securities
that we may issue under the Indenture, and we may issue debt securities in one
or more series up to the aggregate initial offering price authorized by us for
each series. We may, without the consent of the holders of the Notes, reopen
this series of Notes and issue additional Notes under the Indenture in addition
to the $ ,000,000 of Notes authorized as of the date of this prospectus
supplement.
If any interest payment date, redemption date or the maturity
date of the Notes is not a business day at any place of payment, then payment of
the principal, premium, if any, and interest on the Notes may be made on the
next business day at that place of payment. In that case, no interest will
accrue on the amount payable for the period from and after the applicable
interest payment date, redemption date or maturity date, as the case may be.
We will be entitled to redeem the Notes at our option as
described below under "Optional Redemption." The Notes will not be subject to a
sinking fund. You will not have the right to require us to redeem or repurchase
the Notes at your option.
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OPTIONAL REDEMPTION
We may, at our option, redeem the Notes in whole at any time
or in part from time to time, on at least 30 but not more than 60 days prior
notice, at a redemption price equal to the greater of:
o 100% of their principal amount, and
o the present value of the Remaining Scheduled Payments
(as defined below) on the Notes being redeemed on the
redemption date, discounted to the date of
redemption, on a semiannual basis, at the Treasury
Rate (as defined below) plus basis points.
We will also accrue interest on the Notes to the date of redemption. In
determining the redemption price and accrued interest, interest shall be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
If money sufficient to pay the redemption price of and accrued
interest on the Notes to be redeemed is deposited with the Trustee on or before
the redemption date, on and after the redemption date interest will cease to
accrue on the Notes (or such portions thereof) called for redemption and the
Notes will cease to be outstanding.
"Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker as having a maturity
comparable to the remaining term of the Notes to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such Notes. "Independent Investment Banker"
means Chase Securities Inc.
"Comparable Treasury Price" means, with respect to any
redemption date, (1) the average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
on the third business day preceding such redemption date, as set forth in the
daily statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (2) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Trustee obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such Quotations.
"Reference Treasury Dealer" means Chase Securities Inc., Banc
of America Securities LLC and Salomon Smith Barney Inc. and their respective
successors, and, at our option, other primary U.S. government securities dealers
in New York City selected by us.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any redemption date, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m.
on the third business day preceding such redemption date.
"Remaining Scheduled Payments" means, with respect to any
Note, the remaining scheduled payments of the principal thereof to be redeemed
and interest thereon that would be due after the related redemption date but for
such redemption; provided, however, that, if such redemption date is not an
interest payment date with respect to such Note, the amount of the next
succeeding scheduled interest payment thereon will be reduced by the amount of
interest accrued thereon to such redemption date.
"Treasury Rate" means, with respect to any redemption date,
the rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.
SINKING FUND
There will not be a sinking fund for the Notes.
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<PAGE> 13
CERTAIN COVENANTS
The following covenants apply to the Notes.
Limitation on Liens. We will not and will not permit any of
our subsidiaries, other than Centex Financial Services, Inc. and its
subsidiaries, to issue, assume or guarantee any indebtedness for borrowed money
if that borrowed money is secured by a mortgage, pledge, security interest, lien
or other encumbrance (a "lien") on or with respect to any of our properties or
assets or the assets or properties of our subsidiaries or on any shares of
capital stock or other equity interests of any subsidiary that owns property or
assets, other than Centex Financial Services, Inc. and its subsidiaries,
whether, in each case, owned at the date of the Indenture or thereafter
acquired, unless:
(a) we make effective provision under which the Notes are
secured equally and ratably with any and all borrowed
money that we secure, or
(b) the aggregate amount of all of our and our
subsidiaries' secured borrowings, together with all
attributable debt (as defined in the Indenture) in
respect of sale and lease-back transactions existing
at that time, with the exception of transactions that
are not subject to the limitation described in
"Limitation on Sale and Lease-Back Transactions"
below, would not exceed 20% of our and our
subsidiaries consolidated net tangible assets (as
defined in the Indenture), as shown on the audited
consolidated balance sheet contained in the latest
annual report to our stockholders.
The limitation described above will not apply to:
(a) any lien existing on our properties or assets or
shares of capital stock or other equity interests at
the date of the Indenture,
(b) any lien created by a subsidiary in our favor or in
favor of one of our wholly-owned subsidiaries,
(c) any lien existing on any asset of any corporation or
other entity, or on any accession or improvement to
that asset or any proceeds from that asset or
improvement, at the time that corporation or other
entity becomes a subsidiary or at the time we or one
of our subsidiaries merges or is consolidated with or
into us or one of our subsidiaries,
(d) any lien on any asset existing at the time that asset
is acquired, or on any accession or improvement to
that asset or any proceeds from that asset or
improvement,
(e) any lien on any asset, or on any accession or
improvement to that asset or any proceeds from that
asset or improvement, securing indebtedness we incur
or assume for the purpose of financing all or any
part of the cost of acquiring or improving that
asset, if that lien attaches to that asset
concurrently with or within 180 days after the
acquisition or improvement of that asset,
(f) any lien incurred in connection with pollution
control, industrial revenue or any similar financing,
(g) any refinancing, extension, renewal or replacement of
any of the liens described above if the principal
amount of the indebtedness secured is not increased
and is not secured by any additional assets, or
(h) any lien imposed by law.
Limitation on Sale and Lease-Back Transactions. Neither we nor
any of our subsidiaries may enter into any arrangement with any person, other
than with us, under which we or any of our subsidiaries lease any of our
properties or assets, except for temporary leases for a term of not more than
three years and except for sales and leases of model homes, if that property has
been or is to be sold or transferred by us or any of our subsidiaries to that
person (referred to in this prospectus supplement as a "sale and lease-back
transaction").
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<PAGE> 14
The limitation described above does not apply to any sale and
lease-back transaction if:
(a) our net proceeds or the net proceeds of our
subsidiaries from the sale or transfer are equal to
or exceed the fair value, as determined by our Board
of Directors, Chairman of the Board, Vice Chairman,
President or principal financial officer, of the
property so leased,
(b) we or any of our subsidiaries would be entitled to
incur indebtedness secured by a lien on the property
to be leased as described in "Limitation on Liens"
above,
(c) we, within 180 days of the effective date of any sale
and lease-back transaction, apply an amount equal to
the fair value of the property so leased to the
retirement of our "funded indebtedness" (as defined
in the Indenture),
(d) the sale and lease-back transaction relates to a sale
which occurs within 180 days from the date of
acquisition of that property by us or any of our
subsidiaries or the date of the completion of
construction or commencement of full operations on
that property, whichever is later, or
(e) the transaction was consummated prior to the date of
the Indenture.
LEGAL DEFEASANCE
We will be discharged from our obligations on the Notes at any
time if:
(a) we deposit with the Trustee sufficient cash or
government securities to pay the principal, interest,
any premium and any other sums due to the stated
maturity date or a redemption date of the Notes, and
(b) we deliver to the Trustee an opinion of counsel
stating that the federal income tax obligations of
the holders of the Notes will not change as a result
of our performing the action described above.
If this happens, the holders of the Notes will not be entitled
to the benefits of the Indenture except for the registration of transfer and
exchange of Notes and the replacement of lost, stolen or mutilated Notes.
COVENANT DEFEASANCE
We will be discharged from our obligations under any
restrictive covenant applicable to the Notes if we perform both actions
described above under the heading "Legal Defeasance." However, if we cause an
event of default apart from breaching a restrictive covenant, there may not be
sufficient money or government obligations on deposit with the Trustee to pay
all amounts due on the Notes. In that instance, we would remain liable for these
amounts.
FORM OF NOTES
Upon issuance, the Notes will be issued in book-entry form and
be represented by one or more global securities in registered form, without
coupons (the "Global Securities"), which will be issued in a denomination equal
to the aggregate outstanding principal amount of the Notes and deposited with,
or on behalf of, The Depository Trust Company ("DTC") as Depository.
BOOK-ENTRY SYSTEM
The Notes will be represented by Global Securities registered
in the name of Cede & Co., as a nominee of DTC. The information set forth under
"Description of Debt Securities - Global Certificates" in the attached
prospectus will apply to the Notes. Thus, beneficial interests in the Notes will
be shown on, and transfers thereof will be effected only through, records
maintained by DTC and its participants. Except under the circumstances described
below and in the attached prospectus, owners of beneficial interests in the
Global Securities will not be entitled to receive Notes in definitive form and
will not be considered holders of Notes.
S-14
<PAGE> 15
The following is based on information furnished by DTC:
DTC is a limited-purpose trust company
organized under the New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law,
a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant
to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants deposit with DTC. DTC
also facilitates the settlement among participants of
securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized
book-entry changes in the participants' accounts, which
eliminates the need for physical movement of securities
certificates. Direct participants of DTC include securities
brokers and dealers (including the underwriters), banks, trust
companies, clearing corporations and certain other
organizations. DTC is owned by a number of its direct
participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., and the National Association of
Securities Dealers, Inc. Access to DTC's system is also
available to others such as securities brokers and dealers,
banks and trust companies that clear through or maintain a
custodial relationship with a direct participant, either
directly or indirectly. The rules applicable to DTC and its
participants are on file with the SEC.
Purchases of Notes under DTC's system must
be made by or through direct participants, which will receive
a credit for those book-entry notes on DTC's records. The
ownership interest of each actual purchaser of each Note
represented by a Global Security ("beneficial owner") is in
turn to be recorded on the records of the direct participants
and the indirect participants. Beneficial owners will not
receive written confirmation from DTC of their purchase, but
they are expected to receive written confirmations providing
details of the transaction, as well as periodic statements of
their holdings, from the direct participants or the indirect
participants through which the beneficial owner entered into
the transaction. Transfers of ownership interests in a Global
Security are to be accomplished by entries made on the books
of the participants acting on behalf of the beneficial owners.
Beneficial owners of a Global Security will not receive
certificated Notes representing their ownership interests
therein, except in the event that use of the book-entry system
for the book-entry Notes is discontinued.
To facilitate subsequent transfers, all
Global Securities which are deposited with, or on behalf of,
DTC are registered in the name of DTC's nominee, Cede & Co.
The deposit of Global Securities with, or on behalf of, DTC
and their registration in the name of Cede & Co. effect no
change in beneficial ownership. DTC has no knowledge of the
actual beneficial owners of the Global Securities representing
the book-entry Notes; DTC's records reflect only the identity
of the direct participants to whose accounts the book-entry
Notes are credited, which may or may not be the beneficial
owners. The participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other
communications by DTC to direct participants, by direct
participants to indirect participants, and by direct
participants and indirect participants to beneficial owners
will be governed by arrangements among them, subject to any
statutory or regulatory requirements as may be in effect from
time to time. Redemption notices will be sent by DTC.
Neither DTC nor Cede & Co. will consent or
vote with respect to the Global Securities. Under its usual
procedures, DTC mails an omnibus proxy to us as soon as
possible after the applicable record date. The omnibus proxy
assigns Cede & Co.'s consenting or voting rights to those
direct participants to whose accounts the book-entry Notes are
credited on the applicable record date.
Principal, premium, if any, and/or interest,
if any, payments on the Global Securities will be made in
immediately available funds to DTC. DTC's practice is to
credit direct participants' accounts on the applicable payment
date in accordance with their respective holdings shown on
DTC's records unless DTC has reason to believe that it will
receive payment on such date. Payments by participants to
beneficial owners will be governed by standing instructions
and customary practices, as is the case with securities held
for the accounts of customers in bearer form or registered in
"street name", and will be the responsibility of such
participant and not of DTC, the trustee or us, subject to any
statutory or regulatory requirements as may be in effect from
time to time. Payment of principal, premium, if any, and/or
interest, if any, to DTC is our responsibility and that of the
trustee, disbursement of such payments to direct
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<PAGE> 16
participants shall be the responsibility of DTC, and
disbursement of those payments to the beneficial owners shall
be the responsibility of direct participants and indirect
participants.
If applicable, redemption notices shall be
sent to Cede & Co. If less than all of the book-entry Notes of
like tenor and terms are being redeemed, DTC's practice is to
determine by lot the amount of the interest of each direct
participant in the issue to be redeemed.
A beneficial owner shall give notice of any
option to elect to have its book-entry Notes repaid by us,
through its participant, to the Trustee, and shall effect
delivery of such book-entry Notes by causing the direct
participant to transfer the participant's interest in the
Global Security or securities representing such book-entry
Notes, on DTC's records, to the Trustee. The requirement for
physical delivery of book-entry Notes in connection with a
demand for repayment will be deemed satisfied when the
ownership rights in the Global Security or securities
representing such book-entry Notes are transferred by direct
participants on DTC's records.
DTC may discontinue providing its services
as securities depository with respect to the book-entry Notes
at any time by giving us and the Trustee reasonable notice.
Under these circumstances, in the event that a successor
securities depository is not obtained, certificated Notes are
required to be printed or delivered.
We may decide to discontinue use of the
system of book-entry transfers through DTC, or a successor
securities depository. In that event, certificated Notes will
be printed and delivered.
According to DTC, the foregoing information
with respect to DTC has been provided to the financial
community for informational purposes only and is not intended
to serve as a representation, warranty, or contract
modification of any kind.
The information in this section concerning
DTC and DTC's system has been obtained from sources that we
believe to be reliable, but neither we nor any underwriter
takes any responsibility for the accuracy of the information.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the underwriters in
immediately available funds. So long as DTC continues to make its "Same-Day
Funds Settlement System" available to us:
o We will make all payments of principal and interest
on the Notes in immediately available funds.
o The Notes will trade in DTC's Same-Day Funds
Settlement System until maturity.
S-16
<PAGE> 17
UNDERWRITING
We and the underwriters have entered into an Underwriting
Agreement relating to the offering and sale of the Notes (the "Underwriting
Agreement"). In the Underwriting Agreement, we have agreed to sell to each
underwriter, and each underwriter has agreed to purchase from us, the principal
amount of the Notes that appear opposite its name in the table below:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITERS OF THE NOTES
------------ ----------------
<S> <C>
Chase Securities Inc............................... $
Banc of America Securities LLC.....................
Salomon Smith Barney Inc...........................
----------------
Total............................. $
================
</TABLE>
The obligations of the underwriters under the Underwriting
Agreement, including their agreement to purchase Notes from us, are several and
not joint. Those obligations are also subject to certain conditions in the
Underwriting Agreement being satisfied. The underwriters have agreed to purchase
all of the Notes if any of them are purchased.
The underwriters have advised us that they propose to offer
the Notes to the public at the public offering price that appears on the cover
page of this prospectus supplement. The underwriters may offer the Notes to
selected dealers at the public offering price minus a selling concession of up
to % of the principal amount of the Notes. In addition, the underwriters may
allow, and those selected dealers may reallow, a selling concession of up to %
of the principal amount of the Notes to certain other dealers. After the initial
public offering, the underwriters may change the public offering price and any
other selling terms.
In the Underwriting Agreement, we have agreed that:
o we will pay our expenses related to the offering,
which we estimate will be approximately $ ; and
o we will indemnify the underwriters against certain
liabilities, including liabilities under the
Securities Act of 1933.
There is currently no established trading market for the
Notes. In addition, we do not intend to apply for the Notes to be listed on any
securities exchange or to arrange for the Notes to be quoted on any quotation
system. The underwriters have advised us that they intend to make a market in
the Notes, but they are not obligated to do so. The underwriters may discontinue
any market making in the Notes at any time in their sole discretion.
Accordingly, we cannot assure you that a liquid trading market will develop for
the Notes, that you will be able to sell your Notes at a particular time or that
the prices that you receive when you sell will be favorable.
In connection with the offering of the Notes, the underwriters
may engage in overallotment, stabilizing transactions and syndicate covering
transactions in accordance with Regulation M under the Securities Exchange Act
of 1934. Overallotment involves sales in excess of the offering size, which
creates a short position for the underwriters. Stabilizing transactions involve
bids to purchase the Notes in the open market for the purpose of pegging, fixing
or maintaining the price of the Notes. Syndicate covering transactions involve
purchases of the Notes in the open market after the distribution has been
completed in order to cover short positions. Stabilizing transactions and
syndicate covering transactions may cause the price of the Notes to be higher
than it would otherwise be in the absence of those transactions. If the
underwriters engage in stabilizing or syndicate covering transactions, they may
discontinue them at any time.
In the ordinary course of their business, the underwriters and
their affiliates have engaged and may in the future engage in investment and
commercial banking transactions with us and several of our affiliates. Chase
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<PAGE> 18
Securities Inc., Banc of America Securities LLC and Salomon Smith Barney Inc.
are affiliates of one or more of our lenders. In addition to its lending
relationships with us, Chase Bank of Texas, National Association, an affiliate
of Chase Securities Inc., is the Trustee, paying agent and registrar under the
Indenture.
LEGAL OPINIONS
Raymond G. Smerge, Esq., our Executive Vice President, Chief
Legal Officer and Secretary, will issue an opinion about the legality of the
Notes for us. Baker Botts L.L.P., Dallas, Texas, our special counsel, will also
issue an opinion about the legality of the Notes and will pass on, among other
things, the enforceability of the Indenture. Certain legal matters in connection
with the sale of the Notes will be passed upon for the underwriters by Milbank,
Tweed, Hadley & McCloy LLP, New York, New York.
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<PAGE> 19
PROSPECTUS
[CENTEX LOGO]
$750,000,000
DEBT SECURITIES
CENTEX CORPORATION
2728 North Harwood Street
Dallas, Texas 75201
(214) 981-5000
------------------------------
We may offer unsecured general obligations of our company in
the form of either senior or subordinated debt. Senior debt includes both our
notes and debt, and our guarantees of debt incurred by our subsidiaries, all of
which are for money borrowed and not subordinated to any of our other
indebtedness. Subordinated debt is entitled to interest and principal payments
after senior debt payments.
We will provide the specific terms of these securities in
supplements to this prospectus. You should read this prospectus and the
supplements carefully before you invest.
------------------------------
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or passed
upon the adequacy or accuracy of this prospectus. Any representation to the
contrary is a criminal offense.
------------------------------
The date of this prospectus is January 24, 2000.
<PAGE> 20
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we
filed with the SEC utilizing a "shelf" registration process. Under this shelf
process, we may sell any combination of the securities described in this
prospectus in one or more offerings up to a total dollar amount of $750,000,000.
This prospectus provides you with a general description of the securities we may
offer. Each time we sell securities, we will provide a prospectus supplement
that will contain specific information about the terms of the offering. The
prospectus supplement may also add or update information contained in this
prospectus. Together, this prospectus and the related prospectus supplement will
set forth all of the material information regarding any particular offering.
However, in order to get a complete picture of a particular offering, you should
read both this prospectus and any prospectus supplement, together with
additional information, such as the exhibits filed with this registration
statement and described under the heading "Where You Can Find More Information."
CENTEX
Through its various subsidiaries, Centex Corporation is one of
the nation's largest home builders and general building contractors and also
provides retail mortgage lending services. We currently operate in five
principal business segments:
o Home Building;
o Investment Real Estate;
o Financial Services;
o Construction Products; and
o Contracting and Construction Services.
HOME BUILDING
The Home Building business has expanded to include both
Conventional Homes and Manufactured Homes.
The Conventional Homes operations currently involve the
construction and sale of single-family homes, town homes and low-rise
condominiums and also include the purchase and development of land.
In March 1997, we entered the Manufactured Homes business when
we acquired approximately 80% of the predecessor of Cavco Industries, LLC.
Manufactured Homes operations include the manufacture of residential and park
model homes and their sale through company-owned retail outlets and a network of
independent dealers.
INVESTMENT REAL ESTATE
Investment Real Estate operations involve the acquisition,
development and sale of land, and the development of industrial, office, retail
and other commercial projects and apartment complexes.
FINANCIAL SERVICES
Through our Financial Services operations, we offer financing
of conventional and manufactured homes, home equity and sub-prime lending and
the sale of title and other insurance coverages. These activities include
mortgage origination and other related services for homes sold by our
subsidiaries and by others.
CONSTRUCTION PRODUCTS
Through our Construction Products operations, we manufacture
cement, gypsum wallboard and ready-mix concrete for distribution and sale. In
April 1994, our construction products subsidiary, Centex Construction Products,
Inc., completed an initial public offering of 51% of its common stock.
Principally as a result of stock repurchases by Centex Construction Products,
our ownership interest in Centex Construction Products has increased to 63.2% as
of December 31, 1999.
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<PAGE> 21
CONTRACTING AND CONSTRUCTION SERVICES
Contracting and Construction Services activities involve the
construction of buildings for both private and government interests, including
office, commercial and industrial buildings, hospitals, hotels, museums,
libraries, airport facilities and educational facilities.
Our principal executive office is located at 2728 N. Harwood
Street, Dallas, Texas 75201, and our telephone number is (214) 981-5000.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy
statements and other information with the SEC. You may read and copy any
document we file at the SEC's public reference rooms at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's Regional
Offices at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511, and at 7 World Trade Center, Suite 1300, New York, New York
10048. Our SEC filings are also available to the public over the Internet at the
SEC's web site at http://www.sec.gov. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms.
The SEC allows us to "incorporate by reference" the
information we file with them, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is an important part of this prospectus, and
information that we file later with the SEC will automatically update and
supersede this information. We incorporate by reference:
o our Joint Annual Report on Form 10-K of Centex
Corporation, 3333 Holding Corporation and Centex
Development Company, L.P. for the year ended March
31, 1999;
o our Joint Quarterly Reports on Form 10-Q of Centex
Corporation, 3333 Holding Corporation and Centex
Development Company, L.P. for the quarters ended June
30, 1999 and September 30, 1999; and
o our Current Reports on Form 8-K dated August 9, 1999
and August 27, 1999.
We also incorporate by reference any future filings made with
the SEC (File No. 1-06776) under Sections 13(a), 13(c), 14, or 15(d) of the
Securities Exchange Act of 1934 until we sell all of the securities.
You may request a copy of these filings at no cost, by writing
or telephoning us at the following address:
Corporate Secretary
Centex Corporation
2728 North Harwood Street
Dallas, Texas 75201
(214) 981-5000
You should rely only on the information incorporated by
reference or provided in this prospectus or any prospectus supplement. We have
not authorized anyone else to provide you with different information. We are not
making an offer of these securities in any state where the offer is not
permitted.
A WARNING ABOUT FORWARD-LOOKING STATEMENTS
Statements contained in this prospectus, including the
documents that are incorporated by reference, that are not historical facts are
forward-looking statements as defined in the Private Securities Litigation
Reform Act of 1995. These forward-looking statements include information about
possible or assumed future results of our operations. Also, when we use any of
the words "believes," "expects," "anticipates" or similar expressions, we are
making forward-looking statements. Many possible events or factors could affect
the future financial results and performance of our company. This could cause
results or performance to differ materially from those expressed in
2
<PAGE> 22
our forward-looking statements. You should consider these risks when you
purchase securities. These possible events or factors include the following:
o general economic conditions and interest rates;
o the cyclical and seasonal nature of our businesses;
o adverse weather;
o changes in property taxes and energy costs;
o changes in federal income tax laws and federal
mortgage financing programs;
o governmental regulation;
o changes in governmental and public policy;
o changes in economic conditions specific to any one or
more of our markets and businesses;
o competition;
o availability of raw materials; and
o unexpected operations difficulties.
We refer you to the documents identified above under "Where
You Can Find More Information" for a discussion of these factors and their
effects on our business.
USE OF PROCEEDS
Except as otherwise provided in the related prospectus
supplement, we will use the net proceeds from the sale of the offered securities
for general corporate purposes. Initially, we will use substantially all of the
proceeds to repay short-term notes payable to banks and commercial paper
borrowings and to refinance outstanding medium term notes that are maturing.
SUMMARY OF SELECTED FINANCIAL DATA
SELECTED HISTORICAL FINANCIAL DATA
In the table below, we provide you with selected historical
consolidated financial data of Centex Corporation. We prepared this information
using the consolidated financial statements of Centex Corporation for each of
the fiscal years in the five-year period ended March 31, 1999, as well as for
the six-month periods ended September 30, 1999 and 1998. The financial
statements for each of the fiscal years in the five-year period ended March 31,
1999 have been audited by Arthur Andersen LLP, independent public accountants.
The financial statements for the six-month periods ended September 30, 1999 and
1998 have not been audited. Balance sheet information presented in the table
below is as of the end of the applicable period.
When you read this selected historical consolidated financial
data, you should also read the historical financial statements and accompanying
notes that Centex Corporation has included in its joint annual report on Form
10-K for the year ended March 31, 1999 and its joint quarterly report on Form
10-Q for the six months ended September 30, 1999. You can obtain these reports
by following the instructions we provide under "Where You Can Find More
Information" on page 2.
3
<PAGE> 23
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30, FISCAL YEARS ENDED MARCH 31,
----------------------- -----------------------------------------------------------
1999 1998 1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues (1) ................................ $2,801,676 $2,353,688 $5,154,840 $3,975,450 $3,784,991 $3,102,987 $3,277,504
Net earnings (2) ............................ 123,931 104,724 231,962 144,806 106,563 53,365 92,248
Total assets ................................ 4,605,441 3,946,437 4,334,746 3,416,219 2,678,829 2,336,966 2,049,698
Total long-term debt, consolidated .......... 564,581 209,097 284,299 237,715 236,769 321,002 222,530
Total debt, consolidated .................... 2,073,924 1,729,947 1,910,899 1,390,588 864,287 983,269 798,790
Total debt (with financial services
reflected on the equity method) ............ 934,571 475,019 587,955 311,538 283,769 408,253 427,381
Deferred income tax (asset) liability ....... (28,558) (109,643) (49,107) (147,607) (197,413) 16,620 26,737
Debt as a percentage of capitalization (3)
Total debt, consolidated ................... 57.8% 57.0% 57.6% 53.1% 44.5% 57.1% 53.5%
Total debt (with financial services
reflected on the equity method) ............ 38.2% 26.7% 29.5% 20.3% 20.9% 35.6% 38.1%
Stockholders' equity ........................ 1,309,531 1,082,589 1,197,639 991,172 835,777 722,836 668,227
Per common share (2)
Earnings per share - Basic
Before Construction Products IPO gain ..... $ 2.08 $ 1.76 $ 3.90 $ 2.45 $ 1.86 $ 0.94 $ 0.93
Construction Products' IPO gain ........... .63
---------- ---------- ---------- ---------- ---------- ---------- ----------
$ 2.08 $ 1.76 $ 3.90 $ 2.45 $ 1.86 $ 0.94 $ 1.56
========== ========== ========== ========== ========== ========== ==========
Earnings per share - Diluted
Before Construction Products' IPO gain .... $ 2.02 $ 1.69 $ 3.75 $ 2.36 $ 1.80 $ 0.91 $ 0.90
Construction Products' IPO gain ........... 0.61
---------- ---------- ---------- ---------- ---------- ---------- ----------
$ 2.02 $ 1.69 $ 3.75 $ 2.36 $ 1.80 $ 0.91 $ 1.51
========== ========== ========== ========== ========== ========== ==========
Cash Dividends .............................. $ 0.08 $ 0.08 $ 0.16 $ 0.135 $ 0.10 $ 0.10 $ 0.10
</TABLE>
(1) Primarily as a result of repurchases by Centex Construction
Products of its own stock, Centex's ownership interest in
Centex Construction Products increased to more than 50% as of
June 30, 1996 (and was 62.6% as of September 30, 1999).
Accordingly, beginning with the quarter ended June 30, 1996,
Centex Construction Products' financial results have been
consolidated with those of Centex and are reflected in
Centex's revenues and earnings. If Centex Construction
Products' revenues had been consolidated for the years ended
March 31, 1996 and 1995, Centex's consolidated revenues for
those years would have increased by $222,594 and $194,313,
respectively.
(2) Net earnings for the fiscal year ended March 31, 1995 include
a nonrecurring gain of $37.5 million realized in connection
with an initial public offering of 51% of Centex Construction
Products' common stock.
(3) Capitalization is composed of total debt, deferred income tax
liability, negative goodwill, minority interest and
stockholders' equity.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
NINE MONTHS ENDED
DECEMBER 31, FISCAL YEARS ENDED MARCH 31,
----------------- ----------------------------------------------
1999 1998 1999 1998 1997 1996 1995
----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Total enterprise ............................................. 4.43x 4.06x 4.31x 4.16x 3.71x 1.82x 2.99x
Centex (excluding financial services and savings and
loan operations)......................................... 7.22x 7.30x 7.42x 6.83x 5.22x 1.99x 4.16x
</TABLE>
4
<PAGE> 24
These computations include Centex Corporation, and except as
otherwise noted, our subsidiaries, and 50% or less owned companies. For these
ratios, fixed charges include:
o interest on all debt and amortization of debt
discount and expense;
o interest capitalized; and
o an interest factor attributable to rentals.
Earnings include the following components:
o income from continuing operations before adjustment
for minority interests in consolidated subsidiaries
or income or loss from equity investments;
o fixed charges as defined above, but excluding
capitalized interest; and
o amortization of capitalized interest.
The computations that exclude the financial services and
savings and loan operations are included only to provide investors an
alternative method of measuring the ability of our earnings to cover our fixed
charges due to the following:
o the financial services subsidiaries operate in a
distinctly different financial environment that
generally requires significantly less equity to
support their higher debt levels compared to the
operations of our other subsidiaries;
o the financial services subsidiaries have structured
their financing programs substantially on a
stand-alone basis; and
o we have very limited obligations with respect to the
indebtedness of our financial services subsidiaries.
To calculate the ratio of earnings to fixed charges excluding
the financial services and savings and loan operations, the applicable interest
expense was deducted from the fixed charges and the applicable earnings were
deducted from the earnings amount.
DESCRIPTION OF DEBT SECURITIES
Any debt securities that we offer will be our direct unsecured
general obligations. These debt securities will be either senior debt securities
or subordinated debt securities and will be issued under one or more separate
indentures between us and Chase Bank of Texas, National Association, as trustee,
which is the successor to Texas Commerce Bank, National Association. A debt
security is considered "senior" or "subordinated" depending on how it ranks in
relation to our other debts. Senior debt securities will generally rank equal to
other senior debt securities or unsubordinated debt. Holders of our subordinated
debt securities will only be entitled to payment after we pay our senior debts,
including our senior debt securities.
Any senior debt securities that we offer will be issued under
a senior indenture and subordinated debt securities will be issued under a
subordinated indenture. Unless specifically stated otherwise, all references
below to an article or section refer to that article or section in both
indentures.
We have summarized the material provisions of the indentures
in this section, but this is only a summary. The senior indenture and the
subordinated indenture have been filed with the SEC and are incorporated by
reference as Exhibit 4.3 and Exhibit 4.5, respectively, to our registration
statement that contains this prospectus. You should
5
<PAGE> 25
read the indentures for provisions that may be important to you. In the summary
below, we have included references to section numbers of the applicable
indentures so that you can easily locate these provisions. You should review the
applicable indenture for additional information before you buy any debt
securities. Capitalized terms used in the following summary have the meanings
specified in the indentures unless otherwise defined below.
GENERAL INFORMATION ABOUT THE DEBT SECURITIES
Because we are a holding company that conducts all of our
operations through our subsidiaries, holders of our debt securities and certain
security holders of our subsidiaries will generally have a junior position to
claims of creditors of our subsidiaries, including trade creditors, debtholders,
secured creditors, taxing authorities, guarantee holders and any preferred
stockholders. All of our operating subsidiaries have ongoing corporate debt
programs used to finance their business activities. As of September 30, 1999,
our subsidiaries had approximately $1.2 billion of outstanding debt. Moreover,
our ability to pay principal and interest on our debt securities is, to a large
extent, dependent upon our receiving dividends, interest or other amounts from
our subsidiaries. The indentures under which the debt securities are to be
issued do not contain any limitation on our ability to incur additional debt or
on our subsidiaries' ability to incur additional debt to us or to unaffiliated
third parties. In addition, we borrow funds from and lend funds to our
subsidiaries from time to time to manage our working capital needs. Our
indebtedness to our subsidiaries will rank equally in right of payment to our
senior debt securities and senior in right of payment to our subordinated debt
securities.
A prospectus supplement and a supplemental indenture relating
to any series of debt securities being offered will include specific terms
relating to the offering. These terms will include some or all of the following:
o the title, type and amount of the debt securities;
o the total principal amount and priority of the debt
securities;
o the percentage of the principal amount at which the
debt securities will be issued and any payments due
if the maturity of the debt securities is
accelerated;
o the dates on which the principal of the debt
securities will be payable;
o the interest rate which the debt securities will bear
and the interest payment dates for the debt
securities;
o any optional redemption periods;
o any sinking fund or other provisions that would
obligate us to repurchase or otherwise redeem the
debt securities;
o any provisions granting special rights to holders
when a specified event occurs;
o any changes to or additional events of default or
covenants;
o any special tax implications of the debt securities,
including provisions for original issue discount
securities, if offered; and
o any other terms of the debt securities.
None of the indentures limits the amount of debt securities
that may be issued. Each indenture allows debt securities to be issued up to the
principal amount that may be authorized by us and may be in any currency or
currency unit designated by us.
Debt securities of a series may be issued in registered,
bearer, coupon or global form.
6
<PAGE> 26
COVENANTS INCLUDED IN THE INDENTURES
Under the indentures, we will:
o pay the principal, interest and any premium on the
debt securities when due;
o maintain a place of payment;
o deliver a report to the trustee at the end of each
fiscal year reviewing our obligations under the
indentures; and
o deposit sufficient funds with any paying agent on or
before the due date for any principal, interest or
any premium.
PAYMENT OF PRINCIPAL, INTEREST AND PREMIUM; TRANSFER OF SECURITIES
Unless we designate otherwise, we will pay principal, interest
and any premium on fully registered securities in Dallas, Texas. We will make
payments by check mailed to the persons in whose names the debt securities are
registered on days specified in the indentures or any prospectus supplement. We
will make debt securities payments in other forms at a place we designate and
specify in a prospectus supplement. You may transfer or exchange fully
registered securities at the corporate trust office of the trustee or at any
other office or agency maintained by us for such purposes, without having to pay
any service charge except for any tax or governmental charge. (Sections 2.04,
2.06 and 5.02.)
SPECIFIC CHARACTERISTICS OF OUR DEBT SECURITIES
Senior Debt Securities
Generally, our senior debt securities will rank equally with
all of our other senior debt and unsubordinated debt. All series of senior debt
securities issued under the senior indenture will rank equally in right of
payment with each other and with our other senior debt. Any additional senior
debt securities would rank equally in right of payment with the senior debt
securities offered and sold under this prospectus. Further, the senior indenture
does not prohibit us from issuing additional debt securities that may rank
equally in right of payment to the senior debt securities.
Any senior debt securities offered pursuant to the senior
indenture will be senior in right of payment to our subordinated debt
securities. The following table sets forth our senior and subordinated
indebtedness as of September 30, 1999:
<TABLE>
<S> <C> <C>
Senior debt:
6.40% Senior Notes due October 25, 2002 ....... $ 14,948,000
Floating Rate Notes due April 28, 2000 ........ 49,933,000
Floating Rate Notes due May 19, 2000 .......... 9,994,000
Floating Rate Notes due August 25, 2000 ....... 149,794,000
Floating Rate Notes due June 30, 2000 ......... 54,942,000
Floating Rate Notes due July 27, 2000 ......... 61,998,000
Debt to subsidiaries .......................... 204,700,000
Other senior notes ............................ 369,990,000
--------------
Total senior debt ........................ $ 916,299,000
==============
Subordinated debt:
8.75% Subordinated Notes due March 1, 2007 .... $ 99,496,000
7.375% Subordinated Notes due June 1, 2005 .... 99,723,000
Convertible Subordinated Note due 2010 ........ 2,100,000
--------------
Total subordinated debt .................. $ 201,319,000
==============
Total debt ........................ $1,117,618,000
==============
</TABLE>
7
<PAGE> 27
In addition to the amounts listed above, as of September 30,
1999 one of our subsidiaries, CTX Mortgage, had $1.1 billion of outstanding
senior indebtedness, substantially all of which was secured by residential
mortgage loans receivable. Under two CTX Mortgage credit facilities, we had
agreed that, if CTX Mortgage did not replace ineligible mortgages in the
facility, we would purchase the ineligible mortgages up to a maximum of 10% of
the maximum amount of the facility. Under each of the two facilities, our
maximum purchase obligation was $30 million.
In October and November 1999, Centex Home Mortgage, LLC, a
special purpose Delaware limited liability company, issued and sold $500 million
of senior debt securities and $72 million of subordinated membership
certificates. Centex Home Mortgage will use the proceeds from these issuances to
purchase mortgages on a revolving basis from CTX Mortgage. Centex Home Mortgage
has the capacity to sell up to an additional $928 million of senior debt
securities under the same indenture under which the $500 million of debt
securities were issued. As Centex Home Mortgage purchases mortgages from CTX
Mortgage, CTX Mortgage will, in turn, repay its outstanding senior indebtedness
and fund new mortgage originations. On December 15, 1999, $530 million of the
$1.63 billion available under CTX Mortgage's senior secured credit facilities
expired by its terms. As a result, we no longer have the obligation to purchase
ineligible mortgages under the CTX Mortgage credit facilities. Because we do not
guarantee any of CTX Mortgage's indebtedness, it is neither senior nor
subordinated debt to us.
"Senior debt" is defined to include all notes or other
unsecured evidences of indebtedness including guarantees of Centex for money
borrowed by us, not expressed to be subordinate or junior in right of payment to
any other indebtedness of Centex.
Subordinated Debt Securities
The subordinated debt securities that may be offered will have
a junior position to all of our senior debt. Under the subordinated indenture,
payment of the principal, interest and any premium on the subordinated debt
securities will generally be subordinated and junior in right of payment to the
prior payment in full of all senior debt.
Except in certain circumstances, the subordinated indenture
prohibits us from making any payment of principal of or premium, if any, or
interest on, or sinking fund requirements for, any subordinated debt securities:
o in the event we fail to pay the principal, interest,
any premium or any other amounts on any senior debt
when due; or
o if there is any default relating to certain senior
debt beyond the period of grace, unless and until the
default on the senior debt is cured or waived.
(Subordinated Indenture Section 3.02.)
The subordinated indenture does not limit the amount of senior
debt that we may incur. The subordinated indenture provides that all series of
subordinated debt securities that may be offered are equal in priority to our
subordinated debt securities and will rank equally in right of payment to our
subordinated debt securities. (Subordinated Indenture Section 3.02.)
Except in certain circumstances, upon any distribution of our
assets in connection with any dissolution, winding up, liquidation,
reorganization, bankruptcy or other similar proceeding relative to us, our
creditors or our property, the holders of all senior debt will first be entitled
to receive payment in full of the principal and premium, if any, and interest
due on the senior debt before the holders of any subordinated debt securities
are entitled to receive any payment of the principal of and premium, if any, or
interest on any subordinated debt securities. (Subordinated Indenture Section
3.02.) Because of this subordination, if we become insolvent, our creditors who
are not holders of senior debt may recover less, ratably, than holders of senior
debt.
GLOBAL CERTIFICATES
The debt securities of a series may be issued in whole or in
part in the form of one or more global certificates that will be deposited with
a depository identified in a prospectus supplement.
8
<PAGE> 28
The specific terms of the depository arrangements with respect
to any debt securities of a series will be described in a prospectus supplement.
Unless otherwise specified in a prospectus supplement, debt
securities issued in the form of a global certificate to be deposited with a
depository will be represented by a global certificate registered in the name of
the depository or its nominee. Upon the issuance of a global certificate in
registered form, the depository for the global certificate will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the debt securities represented by the global certificate to the accounts of
institutions that have accounts with the depository or its nominee. The accounts
to be credited shall be designated by the underwriters or agents of the debt
securities or by us, if the debt securities are offered and sold directly by us.
Ownership of beneficial interests in a global certificate will be limited to
participants or persons that may hold interests through participants. Ownership
of beneficial interests by participants in a global certificate will be shown
on, and the transfer of that ownership interest will be effected only through,
records maintained by the depository or its nominee for the global certificate.
Ownership of beneficial interests in a global certificate by persons that hold
through participants will be shown on, and the transfer of that ownership
interest within the participant will be effected only through, records
maintained by the participant. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of the securities in
definitive form. These limits and laws may impair the ability to transfer
beneficial interests in a global certificate.
So long as the depository for a global certificate in
registered form, or its nominee, is the registered owner of the global
certificate, the depository or its nominee, as the case may be, will be
considered the sole owner or holder of the debt securities of the series
represented by the global certificate for all purposes under the indentures.
Generally, owners of beneficial interests in a global certificate will not be
entitled to have debt securities of the series represented by the global
certificate registered in their names, will not receive or be entitled to
receive physical delivery of debt securities in definitive form, and will not be
considered the owners or holders of the global certificate under the applicable
indenture.
Payment of principal of, premium, if any, and any interest on
debt securities of a series registered in the name of or held by a depository or
its nominee will be made to the depository or its nominee, as the case may be,
as the registered owner or the holder of a global certificate representing the
debt securities. None of Centex, the trustee, any paying agent, or the
applicable debt security registrar for the debt securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a global
certificate for the debt securities or for maintaining, supervising or reviewing
any records relating to those beneficial ownership interests.
We expect that the depository for debt securities of a series,
upon receipt of any payment of principal, premium or interest in respect of a
permanent global certificate, will credit immediately participants' accounts
with payments in amounts proportionate to their respective beneficial interests
in the principal amount of the global certificate as shown on the records of the
depository. We also expect that payments by participants to owners of beneficial
interests in a global certificate held through the participants will be governed
by standing instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"street name," and the payments will be the responsibility of the participants.
However, we have no control over the practices of the depository and/or the
participants and there can be no assurance that these practices will not be
changed.
Unless it is exchanged in whole or in part for debt securities
in definitive form, a global certificate may generally be transferred only as a
whole unless it is being transferred to certain nominees of the depository.
Unless otherwise stated in any prospectus supplement, The
Depository Trust Company, New York, New York will act as depository. Beneficial
interests in global certificates will be shown on, and transfers of global
certificates will be effected only through, records maintained by The Depository
Trust Company and its participants.
EVENTS OF DEFAULT
"Event of default" with respect to a series of securities
issued under an indenture will mean that any of the following shall have
occurred and be continuing:
9
<PAGE> 29
o failure to pay the principal or any premium on any
debt security when due;
o failure to deposit any sinking fund payment when due;
o failure to pay interest on any debt security when
due, and the continuance of such failure to pay for
30 days;
o failure to perform any other covenant in the
indenture that continues for 60 days after being
given written notice;
o certain events in bankruptcy, insolvency or
reorganization of Centex; or
o any other event of default included in any indenture
or supplemental indenture. (Section 7.01.)
An event of default for a particular series of debt securities
does not necessarily constitute an event of default for any other series of debt
securities issued under an indenture. The trustee may withhold notice to the
holders of debt securities of any default, except in the payment of principal or
interest, if it considers such withholding of notice to be in the best interests
of the holders.
If an event of default for any series of debt securities
occurs and continues, the trustee or the holders of at least 25% of the total
principal amount of the debt securities of the series may declare the entire
principal of that series due and payable immediately. (Section 7.01.) If this
happens, subject to certain conditions, the holders of a majority of the
aggregate principal amount of the debt securities of that series can void the
declaration. (Section 7.01.) The trustee will not be charged with knowledge of
any event of default other than our failure to make principal and interest
payments unless actual written notice is received by the trustee. (Section
7.01.)
The indentures limit the right to institute legal proceedings.
No holder of any debt securities will have the right to bring a claim under an
indenture unless
o the holder has given written notice of default to the
trustee;
o the holders of not less than 25% of the aggregate
principal amount of debt securities of a particular
series shall have made a written request to the
trustee to bring the claim and furnished the trustee
reasonable indemnification as it may require;
o the trustee has not commenced an action within 60
days of receipt of that notice and indemnification;
and
o no direction inconsistent with the request has been
given to the trustee by the holders of not less than
a majority of the aggregate principal amount of the
debt securities of the series then outstanding.
Subject to applicable law and any applicable
subordination provisions, the holders of debt
securities may enforce payment of the principal of or
premium, if any, or interest on their debt
securities. No holder of debt securities of a
particular series has the right to prejudice the
rights or obtain priority or preference over the
rights of any other holder of debt securities of that
series. (Section 7.04.)
The holders of a majority of the aggregate principal amount of
any series of debt securities may direct the time, method and place of
conducting any proceeding for any remedy available to the trustee or exercising
any power conferred on the trustee. The trustee, however, may decline to follow
that direction if, being advised by counsel, the trustee determines that the
action is not lawful. In addition, the trustee may refuse to act if it in good
faith determines that the action would unduly prejudice the holders of the debt
securities not taking part in the action or would impose personal liability on
the trustee. (Section 7.06.)
10
<PAGE> 30
Each indenture provides that, in case an event of default in
respect of a particular series of debt securities has occurred, the trustee is
to use the degree of care of a prudent man in the conduct of his own affairs.
(Section 8.01.) Subject to those provisions, the trustee is under no obligation
to exercise any of its rights or power under the indentures at the request of
any of the holders of the debt securities of a particular series unless they
have furnished to the trustee security or indemnity in reasonable amounts
against the costs, expenses and liabilities which may be incurred by the
trustee. (Section 8.02.)
We will be required to furnish to the trustee an annual
statement as to the fulfillment by Centex of all of our obligations under the
relevant indenture. (Section 5.06.)
DEFEASANCE OF DEBT SECURITIES
We will be discharged from our obligations on the debt
securities of any series at any time we deposit with the trustee sufficient cash
or government securities to pay the principal, interest, any premium and any
other sums due to the stated maturity date or a redemption date of the debt
securities of the series. If this happens, the holders of the debt securities of
the series will not be entitled to the benefits of the indenture except for
registration of transfer and exchange of debt securities and replacement of
destroyed, lost, stolen or mutilated debt securities. (Section 13.01.)
Under federal income tax law as of the date of this
prospectus, a discharge may be treated as an exchange of the related debt
securities. Each holder might be required to recognize a gain or loss equal to
the difference between the holder's cost or other tax basis for the debt
securities and the value of the holder's interest in the trust. Holders might be
required to include as income a different amount than would be includable
without the discharge. We urge you to consult your tax adviser as to the
consequences of a discharge, including the applicability and effect of tax laws
other than the federal income tax law.
CONSOLIDATION, MERGER OR SALE OF CENTEX
Each indenture generally permits us to consolidate or merge
with another corporation. The indentures also permit us to sell all or
substantially all of our property and assets. If this happens, the remaining or
acquiring corporation will assume all of our responsibilities and liabilities
under the indentures including the payment of all amounts due on the debt
securities of each series outstanding and performance of the covenants in the
indentures.
However, we will only consolidate or merge with or into any
other corporation or sell all or substantially all of our assets according to
the terms and conditions of the indentures. The remaining or acquiring
corporation will be substituted for us in the indentures with the same effect as
if it had been an original party to the indenture. Thereafter, the successor
corporation may exercise our rights and powers under any indenture, in our name
or in its own name. Any act or proceeding required or permitted to be done by
our Board of Directors or any of our officers may be done by the board or
officers of the successor corporation. (Article Twelve.)
MODIFICATION OF THE INDENTURES
Under each indenture we may modify rights and obligations and
the rights of the holders with the consent of the holders of a majority in
aggregate principal amount of the outstanding debt securities of each series
affected by the modification. We cannot, however, modify the principal or
interest payment terms, or reduce the percentage required for modification,
against any holder without its consent. We may also enter into supplemental
indentures with the trustee, without obtaining the consent of the holders of any
series of debt securities, to cure any ambiguity or to correct or supplement any
provision of an indenture or any supplemental indenture which may be defective
or inconsistent with any other provision, to pledge any property to or with the
trustee or to make any other provisions with respect to matters or questions
arising under the indentures, provided that such action does not adversely
affect the interests of the holders of the debt securities. We may also enter
into supplemental indentures without the consent of holders of any series of
debt securities to set forth the terms of additional series of debt securities,
to evidence the succession of another person to our obligations under the
indenture or to add to our covenants. (Article Eleven.)
11
<PAGE> 31
CERTIFICATES AND OPINIONS TO BE FURNISHED TO TRUSTEE
Each indenture provides that, in addition to other
certificates or opinions that may be specifically required by other provisions
of an indenture, every time we ask the trustee to take action under such
indenture, we must provide a certificate of certain of our officers and an
opinion of counsel, who may be our counsel, stating that, in the opinion of the
signers, all conditions precedent to such action have been complied with.
(Section 15.07.)
REPORT TO HOLDERS OF DEBT SECURITIES
We will provide audited financial statements annually to
holders of debt securities. (Section 6.03.) The trustee is required to submit an
annual report to the holders of the debt securities regarding, among other
things, the trustee's eligibility to serve as trustee, the priority of the
trustee's claims regarding certain advances made by it, and any action taken by
the trustee materially affecting the debt securities. (Section 6.04.)
THE TRUSTEE
Chase Bank of Texas, National Association, whose Corporate
Trust Office is located at 600 Travis Street, Suite 1150, Houston, Texas 77002,
is the trustee under the subordinated indenture and the senior indenture. Chase
Bank of Texas, National Association also serves as trustee with respect to our
$100,000,000 8.75% subordinated notes due March 1, 2007 and our $100,000,000
7-3/8% subordinated notes due June 1, 2005, all previously issued under the
subordinated indenture, as supplemented by a subordinated indenture supplement
dated as of March 12, 1987 and a subordinated indenture supplement dated as of
June 9, 1995, respectively. Chase Bank of Texas, National Association also
serves as trustee with respect to our $15,000,000 6.40% senior notes due October
25, 2002, our $50,000,000 floating rate senior notes due April 28, 2000, our
$10,000,000 floating rate senior notes due May 19, 2000, our $55,000,000
floating rate senior notes due June 30, 2000, our $62,000,000 floating rate
senior notes due July 27, 2000, our $150,000,000 floating rate senior notes due
August 25, 2000, our $30,500,000 floating rate senior notes due April 2, 2001,
our $8,000,000 floating rate senior notes due July 13, 2001 and our $69,500,000
floating rate senior notes due July 13, 2001, all previously issued under the
senior indenture, as supplemented by senior indenture supplements dated as of
October 1, 1998 and August 1, 1999, respectively.
Pursuant to the indentures and the Trust Indenture Act of
1939, any uncured event of default with respect to any series of debt securities
will force the trustee to resign as trustee under the applicable indenture. If
the trustee resigns, a successor trustee will be appointed in accordance with
the terms and conditions of the applicable indenture.
Centex and its affiliates maintain other banking relationships
in the ordinary course of business with the trustee and its affiliates.
The trustee may resign or be removed by us with respect to one
or more series of debt securities and a successor trustee may be appointed to
act with respect to any such series. The holders of a majority in aggregate
principal amount of the debt securities of any series may remove the trustee
with respect to the debt securities of that series. (Section 8.10.)
Each indenture contains limitations on the right of the
trustee, in the event that the trustee becomes our creditor, to obtain payment
of claims in certain cases, or to realize on certain property received in
respect of any such claim as security or otherwise. (Section 8.13.)
RATINGS OF OUR DEBT SECURITIES BY RATING AGENCIES
Particular series of debt securities may be rated by one or
more nationally recognized statistical rating agencies. The rating agency or
agencies and rating or ratings to be assigned with respect to a series of debt
securities may be specified in the prospectus supplement for the series of debt
securities.
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METHOD FOR CALLING MEETINGS OF THE HOLDERS OF DEBT SECURITIES
Each indenture contains provisions describing how meetings of
the holders of debt securities of a series may be convened. A meeting may be
called at any time by the trustee, and also, upon request, by us or the holders
of at least 10% in principal amount of the outstanding debt securities of a
series. A notice of the meeting must always be given in the manner described
under "--Notices to Holders of Debt Securities" below. Generally speaking,
except for any consent that must be given by all holders of a series as
described under "--Modification of the Indentures" above, any resolution
presented at a meeting of the holders of a series of debt securities may be
adopted by the affirmative vote of the holders of a majority in principal amount
of the outstanding debt securities of that series, unless the indenture allows
the action to be voted upon to be taken with the approval of the holders of a
different specific percentage of principal amount of outstanding debt securities
of a series. In that case, the holders of outstanding debt securities of at
least the specified percentage must vote in favor of the action. Any resolution
passed or decision taken at any meeting of holders of debt securities of any
series in accordance with the applicable indenture will be binding on all
holders of debt securities of that series and any related coupons, unless, as
discussed in "--Modification of the Indentures" above, the action is only
effective against holders that have approved it. The quorum at any meeting
called to adopt a resolution, and at any reconvened meeting, will be holders
holding or representing a majority in principal amount of the outstanding debt
securities of a series.
GOVERNING LAW
Each indenture and each series of debt securities will be
governed by and construed in accordance with the laws of the State of Texas.
NOTICES TO HOLDERS OF DEBT SECURITIES
Notices to holders of debt securities will be mailed to the
addresses of the holders listed in the senior debt security register or the
subordinated debt security register, as applicable.
PLAN OF DISTRIBUTION
We may sell the offered securities (a) through agents; (b)
through underwriters or dealers; or (c) directly to one or more purchasers.
SALE OF DEBT SECURITIES BY AGENTS
Offered securities may be sold through agents designated by
us. The agents agree to use their reasonable best efforts to solicit purchases
for the period of their appointment.
SALE OF DEBT SECURITIES BY UNDERWRITERS
If underwriters are used in the sale, the offered securities
will be acquired by the underwriters for their own account. The underwriters may
resell the securities in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The obligations of the underwriters to purchase the
securities will be subject to certain conditions. The underwriters will be
obligated to purchase all the securities of the series offered if any of the
securities are purchased. Any initial public offering price and any discounts or
concessions allowed or re-allowed or paid to dealers may be changed from time to
time.
DIRECT SALES OF OUR DEBT SECURITIES
Offered securities may also be sold directly by us. In this
case, no underwriters or agents would be involved.
GENERAL INFORMATION ABOUT OUR PLAN OF DISTRIBUTION
Underwriters, dealers and agents that participate in the
distribution of the offered securities may be underwriters as defined in the
Securities Act of 1933, and any discounts or commissions received by them from
us
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and any profit on the resale of the offered securities by them may be treated as
underwriting discounts and commissions under the Securities Act. Any
underwriters or agents will be identified and their compensation described in a
prospectus supplement.
We may have agreements with the underwriters, dealers and
agents to indemnify them against certain civil liabilities, including
liabilities under the Securities Act, or to contribute with respect to payments
which the underwriters, dealers or agents may be required to make. If we enter
into any indemnification agreements of this nature, we will describe each of
those agreements in the prospectus supplement.
Underwriters, dealers and agents may engage in transactions
with, or perform services for, us or our subsidiaries in the ordinary course of
their businesses.
LEGAL OPINIONS
Raymond G. Smerge, Esq., our Executive Vice President, Chief
Legal Officer and Secretary, will issue an opinion about the legality of the
offered securities for us. Baker Botts L.L.P., Dallas, Texas, our special
counsel, will also issue an opinion about the legality of the offered securities
and will pass on, among other things, the enforceability of the indentures.
Certain legal matters in connection with the sale of the notes offered hereby
will be passed upon for the agents by Milbank, Tweed, Hadley & McCloy LLP, New
York, New York.
EXPERTS
The financial statements and schedules incorporated by
reference in this prospectus and elsewhere in the registration statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said reports.
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