<PAGE> 1
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-94221
Prospectus Supplement to Prospectus dated January 24, 2000
$200,000,000
CENTEX CORPORATION [LOGO]
9.750% NOTES DUE 2005
MATURITY
- The Notes will mature on June 15, 2005.
INTEREST
- Interest on the Notes is payable on June 15 and December 15 of each year,
beginning December 15, 2000.
- Interest on the Notes will accrue from June 19, 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.
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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>
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PER NOTE TOTAL
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<S> <C> <C>
Initial Price to Public 99.998% $199,996,000
Underwriting Discount 0.600% $ 1,200,000
Proceeds to Us (Before Expenses) 99.398% $198,796,000
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</TABLE>
Your purchase price will also include any interest that has accrued on the Notes
since June 19, 2000.
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- The Notes will be delivered to you in global form through the book-entry
delivery system of The Depository Trust Company on or about June 19, 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
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The date of this Prospectus Supplement is June 14, 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.
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TABLE OF CONTENTS
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PAGE
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<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
</TABLE>
<TABLE>
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PAGE
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<S> <C>
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
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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.
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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
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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.
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RATIO OF EARNINGS TO FIXED CHARGES
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FISCAL YEARS ENDED MARCH 31,
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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.
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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>
Senior debt:
Medium-Term Note programs, 6.4% to 6.89% .................... $ 539,439,000
Notes to Contracting and Construction Services
group .................................................... 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.
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<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 $200,000,000.
The Notes will bear interest from June 19, 2000, payable on June 15 and
December 15 of each year, commencing December 15, 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 the June 1 or December 1 next preceding the June 15 or
December 15 interest payment date. The Notes will mature on June 15, 2005 and
will accrue interest at a rate of 9.750% 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 $200,000,000 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 fifty
basis points (.50%).
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.
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<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.
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<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. ............. $150,000,000
Banc of America Securities LLC .... 25,000,000
Salomon Smith Barney Inc. ......... 25,000,000
------------
Total ............ $200,000,000
============
</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 0.350%
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 0.250% 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 $150,000; 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
Securities Inc., Banc of America Securities LLC and Salomon Smith Barney Inc.
are affiliates of one or more of our
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<PAGE> 18
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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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
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<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>
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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