CENTRAL PARK VILLAGE - CENTEX HOMES
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.Centr~ Park
5110 Village
EISENHOWER
BOULEVARD
SUITE 250
TAMPA,
FLORIDA
33634
e
CENTEX HOMES
PROPOSER GENERAL INFORMATION
Centex Corporation was founded in 1950 and is currently a Fortune 500 company traded
on the New York Stock Exchange (ticker symbol "CTX"). Laurence E. Hirsch serves as
Chairman and Chief Executive Officer and David W. Quinn serves as Vice Chairman.
Corporate headquarters are located at 2728 North Harwood, Dallas, Texas 75201-1516.
TAMPA DIVISION HEADQUARTERS
~ Centex Homes
5110 Eisenhower Boulevard / Suite 250 · Tampa, FL 33634
(813) 249-8302
(813) 249-8415 fax
PRIMARY CONTACT PERSON
~ Gary Jermgan · Centex Homes
~
.Centr~ Park
5110 Village
EISENHOWER
BOULEVARD
SUITE 250
TAIv\PA,
FLORIDA
33634
e
I:ENTEX HOMES
CENTRAL PARK VILLAGE PROJECT TEAM
CORPORATE OFFICE:
Centex Corporation
2728 North Harwood · Dallas, Texas 75201-1516
(214) 981-5000
LOCAL OFFICES:
~ CENTEX (Hil!sborough)
5110 Eisenhower Boulevard / Suite 250 · Tampa, FL 33634
Gary Jernigan
(813) 249-8302
(813) 249-8415 fax
~ FLORIDA PLANNING STUDIOS
2304 San Jose Circle · Tampa, FL 33629
David Maltby
(813) 837-2977
(813) 837-2635 fax
~ FLORIDA DESIGN CONSULTANTS, ING
2639 R~~y-e" Clearwater, FL 33759
~ LEGGETTE, BRASHEARS & GRAHAM, ING
10014 North Dale Mabry Hwy / Suite 205 · Tampa, FL 33618
Dave Wiley
(813) 968-5882
(813) 968-9244 fax
OFFICE LOCATION
The master planning of Central Park Village will be performed at each of the above
offices. \Vith the exception of limited outside consulting, the entire project will be
completed by companies located in Tampa Bay.
~
.Centr~ Park
5110 Village
EISENHOWER
BOUlEVARD
SUITE 250
TAMPA,
FLORIDA
33634
It
I:ENTEX HOMES
CENTEX CORPORATION OVERVIEW
Centex Corporation, through its subsidiaries, continuously ranks among America's premier
companies in the Home Building, Financial Services and Contracting and Construction
Services industries. Centex was founded in 1950 and is currently a Fortune 500 company
traded on the New York Stock Exchange. In Fiscal Year 1999, Centex had revenues in
excess of $5.1 Billion with total assets of more than $4.3 Billion.
Centex Homes is one of the nation's largest on-site home builders. During Fiscal Year
1999, Centex Homes completed 14,792 homes in 52 markets in 20 states.
The Centex Financial Services Group includes CTX Mortgage Company which originat-
ed $10.1 Billion of mortgages in Fiscal Year 1999 from 251 offices m 38 states and
Metropolitan Title & Guaranty Company which provides title insurance to Centex
compames.
Centex Development Company and Centex MF Company initiated $64 Million in
commercial and multi-family projects during Fiscal Yc;'ilf>1999 and currently have a.H:S.
land portfolio of approximately 2,200 acres.
Centex Constnidtion ~EgllP, which consistently ranks as one of the nation's
building contractors,has,four major subsidiaries including Centex Rooney
Company, Florida's largest general contractor.
.
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CENTEX HOMES
Honoredfor Innovative Spirit
Each local manager in Centex Homes' 54 markets nationwide is
empowered to make decisions that reflect the customers' needs
and wants for that market.
.
The focus for every member of the Centex Homes team is for the
company to get better before it gets bigger, Eller says.
"We have the team in place
at every level of the organi-
zation to make this happen,"
says Eller. "This award from
Professional Builder honors
the entire Centex Homes
organization and what they
continue to achieve."
.
Cel/lex llollles is (/ SIIIJsidhIlJ' of Dallas, Te.\"{/s.[JIIsed
Cel/te.x COIjJomlirm, (l Nl'SE compall)' (IYlll{)(){: CrX),
{(Ihicb a/so IJ(/S operations ill HI/[IIIe/al Ser/licL's, llll,'cst-
l/lf!lIl Real E,>{{/(c ami COlltractillg (Iud C()IIslrllctirJ//
Sen1lces.
~
ommum
www.centexhomes.com
"I inherited a very
people-oriented
company where the
individual matters."
.. Tim Ellel'
Chairman & C.E.O.
Centex Homes
Professional Builder Giant 400:
How Centex Homes Ranks
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Your dreams are becoming
realit)' in wonderfll1 neighborhoods
throughout the Tampa area. From
design concept through closing and
beyond, we're with you evel)' step of the
way to assure your new Centex home is
exactly what you oqJect - and more.
When you're ready to make your
dreams come true, we're with you!
-I:ENTEX-
= HOMES =
813/249-8302
www.centexhomes-tampa.com
NORTHWEST HILLSBOROUGH
1. Camblidge Villas
Single-5tOl)' villas from
the llpper $1105.
813/908-0500
2. Carrollwood Cove
Single-Family Homes from the $120s.
813/269-8500
3. Trafalgar Square
Townlwmes from the mid $ 80s.
813/963-1400
4. Fawn Lake
Single-Family Homes from the high $110s.
813/920-7700
5. Brookshire Estates
Last Chance! Single-Family
Homes from the low $lOOs.
813/264-2800
KEYSTONE
6. Montreux
Executive Homes from the $180s.
813/926-3701
BRANDON
7. Providence Lakes
Coming Soon!
Single-FC1Illily Homes from
the low $100s.
Barrington: 813/661-6627
8. The Estates at River
Crossing
Single-Family Homes from
the mid $llOs.
813/684-9046
SOUTH TAMPA
9. Harbourside at
Harbour Island
TownllOmes from the $180s.
813/225-1042
10. Bayshore Pointe
TownllOmes from the $150'1.
813/902-9505
N.E. ST. PETEI,SBURG
11. BlightOll Bay
Single-Felinity homes
fmm the $1505.
Tcnl'l1homes Coming Soon!
727/576-6789
~
.Cent~ Park
5110 Village
EISENHOWER
BOUlEVARD
SUrTE 250
TAMPA,
FLORIDA
33634
e
E:ENTEX HOMES
QUALIFICATIONS OF KEY TEAM MEMBERS
The following pages are the resumes of the Key Team Members for the project
planned for Central Park Village.
~Centex Homes
~ Florida Planning Studios
~ Florida Design Consultants, Inc.
~ Leggette, Brashears & Graham, Inc
~
.Centr~ Park
5110 Village
EISENHOWER
BOUlEVARD
SUm: 250
TAMPA,
FLORIDA
33634
e
CENTEX HOMES
(ENTEX HOMES KEY TEAM MEMBERS
~GARY JERNIGAN
Dro~wnPn~dmt/Tampa
Received a business degree from the University of Washington. Gary has been in the
Centex Organization for over 23 years. In his current position, he is responsible for the total
operations of the Tampa Bay Division of Centex Homes. Prior to moving to the Tampa
Bay area, Gary spent fourteen years in the Washington, D.G area as the president of that
division.
~ RON LEWIS
Land Development Manager
Received degrees from the Liverpool College of Technology and HNC Civil Engineering.
Ron has been the Land Development Manager at Centex Homes for the last year. Prior to
Ron joining the Centex Team, he performed similar duties for various other companies
throughout Florida for the past 15 years. Ron holds the following licenses: Certified
General Contractors License, Registered Professional Engineer, and State of Florida Real
Estate License. In addition Ron is a member of the following organizations: Builder's
Association of Greater Tampa, National Association of Industrial and Office~arks,~l~~~
Engineering Society, American Society. of Civil Engineers, Fellow ofIhe..II1~:~ituti~I1.of
Civil Engineers (United Kingdom);
~ KEVIN R ES
Construction ger
Graduated a B~che or ofArts'i~ Communication fromi:he'University.of~est
Kevin hasb with Centex Homes for 3 years and has been the c~nstrl,lction man
1 year. His ... les'include overseeing all residential construction fortheTampa div~sio
Kevin holds a class III residential contractors license, a real estate sales license and:is a
member of the local Sales and Marketing Counsel.
~ KEN PODLIN
Sales Manager
Receiveci;} ~~~j~~~usi~essTI'ith an emphasis on MIS from the University of SouthFlor~da.
K~p:h~sbeenthesal~s marIag~rforthe past 2 1/2 years and worked for Centex Homes as
a sales ~~unselorfor~;;:years prior. Since becoming the sales manager Ken has received .a
Platinum Citation (over $25 million in sales volume) for the Million Dollar Circle Awards,
awarded annually by the National Association of Home Builders. Locally Ken won the
Sales Manager of the Year for 1998 awarded by the local chapter of the Sales & Marketing
Council. Ken has lived in Tampa for over 20 years and is a member of the following
organizations: Builder's Association of Greater Tampa, Tampa Sales and Marketing
Council, and is a Certified Sales Professional.
~
.Centr~ Park
5110 Village
EISENHOWER
BOUlEVARD
SUITE 250
TAMPA,
FLORIDA
33634
e
CENTEX HOMES
(ENTEX HOMES KEY TEAM MEMBERS
continued
~NANCYREYNOLDS
Controller
Received her undergraduate degree in Accounting from the University of Florida and
completed her MBA in Accounting from the University of South Florida. Nancy has been
controller at Centex Homes Tampa Division for 2 1/2 years and has lived in Tampa for 12
years. She is 1. member of the Association of Professional Mortgage Women (APMW).
~GREG STEERS
Purchasing Manager
Graduated from Oklahoma State University where he majored in accounting and finance.
Greg has been with the Tampa division of Centex for 1 year as the purchasing manager.
He worked for the Virginia/Maryland and Texas divisions of Centex Homes, as VP of
Construction, for 11 years (from 1982 - 1993). Greg has been instrumental in the
introduction of an entirely new product line for the Tampa Division. Since his arrival, over
20 new floorplans have been introduced. Greg has completed the following studies:
Supervisor training, Real Estate Finance, Quality is Free, and TQM - train the trainer.
~NORMAN LEI
Regional Architect
Received a BaSl1elor of Architecture California Polytechnic inPj~<.)J:1a.Norrn.~p
worked for q~Il,tex Homes for the past2 years, has been involved incop.sept~al's~Il,d~~te
planning for the southeast region of Cent ex Homes. Prior to Cep.tex, NormaJ:1wasthe~
of Planning and. Design withWCI where he was responsiblefornumerous.~ast nned
communities. F oLi~5 years in CaliforniaNorman worked for some of the.i~o~t
architecturefjrs on re~idential (both single-family and multifamilY)i)~~~~Il, in7
planned co~. .ii. ......i downtown hotels, and specialized in high ~ensityJ?fojec
Norman ha~?peeninFloridafor 4 years and is currently a member of the Urban Lan
Institute and the i National Home Builders Association.
~KEVIN~~OS
Assistant Dif~f~'!r o. ... ......~rketing
Gradll:J.Ftdfrorn Florid~ State University with a BS in Finance and completed his MBA
~~PITI the University of South Florida with an emphasis on marketing and management.
Kevin has worked for Centex Homes in Tampa for 1 1/2 years and is responsible for point
of sale materials, local corporate image, advertising, realtor relations, and market research.
Kevin has lived in Tampa for 23 years and is a member of the local Sales and Marketing
Council.
.....
.Centr~ Park
5110 Village
EISENHOWER
BOULEVARD
SUITE 250
TAMPA,
FLORIDA
33634
e
I:ENTEX HDMES
Tampa Division
REPRESENTATIVE CENTEX HOMES PROJECTS
CURRENT PROJECTS UNDER CONSTRUCTION
~ HARBOURSIDE AT HARBOUR ISLAND
Tampa, FL
Luxury Three Story Townhomes
90 Units
Models Open Jan '00
~BRIGHTON BAY - WYNGATE
St. Petersburg, FL
Affordable Two Story Townhomes
150 Units
Models Open Dee '00
~BAYSHORE POINTE
Tampa, FL
Luxury Thre~
150 Units
Models Open
~TRAFALc;ARSQUARE
Tampa, FL
Affordable Two Story Townhomes
92 Units
Models Opened Oct '98
~~~B.. ..RID.....................G.................:E...................V.....................:.~..~.IL.....................L......:....................A...... .8.
Tampa, FL
Single Story Attached Villas
80 Units
Models Opened Nov '99
Centex Homes also has the following single-family developments under construction in
the Tampa Bay area: Montreux at Stillwater, Carrollwood Cove, Fawn Lake,
Providence Lakes - Barrington, Brookshire Estates, The Estates at River Crossing
~
.Cent~ Park
5110 Village
EISENHOWER
BOUlEVARD
SUm: 250
TAMPA,
FLORIDA
33634
e
I:ENTEX HOMES
FLORIDA PLANNING STUDIO, INC.
DAVID K. MALTBY
Principal
Mr. Maltby is a Community Planner with 29 years experience in providing planning services for
land development projects. His capabilities include feasibility studies, urban planning, urban
design, mastei planning, environmental planning, detailed site design, Comprehensive Plan
Amendments, DRIs and rezonings. He has worked on projects throughout Florida specializing
in large scale and/or projects with complex issues to resolve. Four important aspects of his
planning approach are (1) the incorporation of the site's natural features into an imaginative yet
realistic development plan which balances proposed land uses with environmental constraints;
(2) maximum site developability; (3) understanding of both short term and long term market
conditions; and, (4) early stage planning solutions that minimize future design problems and
construction costs. Mr. Maltby's experience is particularly strong in the DRI and rezoning
process. He has personally been involved in over 30 DRI's and 150 rezonings. Identified below
are some of his recent major projects.
REPRESENfATIVE PROJECTS
Some of Mr. Maltby's recent "Traditional Neighborhood": design work includes the !g~
Center for Fishhawk Ranch, Town Centerfor On Top Of The World, T(')~P:i:Center for~pl
Ocala, and revisions to Westchase'sWestPark Town Center.
· Harbour Island -.250 Acre Mixed Use Island Community
· Hunters GW~..0J ,800Acre. (}alf Course Community
· W~stchase72,00Q Ac:rel\fli~~ Use Project
· West Center Revisions
~i;~ .. ..~~~~ential Community
.Col~5,200Acre Mixed Use Community
.~~~ ... .... < s . untryi:Club - 1,800 Acre Country Club
· Kingsland - 2,000 Acre Golf Course Community
· The Villages - 7,000 Acre Active Retirement Community
· Gamble Creek - 1,500 Acre Golf Course Community
· Tampa Technology Park - 2,000 Acre Business Community
· Bay Port Colony - 2,300 Acre Mixed Use Community
· Parkway Center - 1,000 Acre Industrial Park
· Southbend - 700 Acre Mixed Use Community
· Citrus Park Mall - 230 Acre Regional Mall
· Fish Hawk Ranch - 5,000 Acre Mixed Use Res Project
· Fish Hawk Ranch - TND Town Center
~
.Cent~ Park
5110 Village
EISENHOWER
BOUlEVARD
SUm: 250
TAMPA,
FLORIDA
33634
e
CENTEX HOMES
FLORIDA PLANNING STUDIO, INC.
continued
· Highland Country Club - 400 Acre Golf Course Community
· Lakewood Ranch - 5,000 Acre Golf Course Community
· Connerton - 8,000 Acre Mixed Use Community
· Florida Corporate Center - 450 Acre Mixed Use Community
· Lansbrook - 2,500 Acre Mixed Use Community
· Northwood - 680 Acre Residential Community
· On Top Of The World - 13,000 Acre Mixed Use Community
· On Top Of The World - TND Town Center
· Golden Ocala - 600 Acre Golf Course Community
· Golden Ocala - TND Town Center
Current Position
Principal, Florida Planning Studio, Inc.
Responsible for all aspects of the firm's Community Planning
Previous Experience
Planning Director, Florida Land Design & Etlgine~ring, Inc. Dame$~Moore, Tam
Florida Responsible for marketing ~l1d planning services on a.wide range of g,~jeds
throughout 'da...EfCamples of projects are listed above in Representatiye Proj~ct
Re ...............rl~tlning Director Post, Buckley,Schuh&Jerni~~n,Inc.,
~ibleformarketing and completion of a wide v~riety<pfpl,llJ.ping
proj~ctSirl~IU ...... asi:~rPlanllingJor the 4,000 acre Tarpon Lake Villages project in
HiUsborough County and the DRI ADA for Busch Gardens, Ta~pa, Florida.
DRI Coordinator, Treasure Coast Regional Planning Council Manager of the regulatory
review of environmental, engineering, land use and transportation impacts analysis for a
variety of DRI projects.
Project Planner at the office of Mark Gluckman Planning Consultant, Jacksonville, Florida
Master Plan and DRIADA for ArgleForest, a 9,600 acre master planned community in
Duval County Master Plan and DRI ADA for Belfort Station, a 250 acre regional shopping
center in Jacksonville Master Plan for the Villages of St. Lucie, a 15,000 acre proposed new
town to support an oil refinery in St. Lucie County.
~
.Cent~ Park
5110 Village
EISENHOWER
BOULEVARD
SUITE 250
TAMPA,
FLORIDA
33634
e
CENTEX HDMES
FLORIDA PLANNING STUDIO, INC.
continued
Academic Background
Master of Arts in Urban & Regional Planning
1977, University of Florida
Bachelor of i\rts in Architecture
1970, University of Florida
Citizenship
United States
Countries Worked in
United States
Guam, U.S. Territory
Saipan, CNMI
Trinian, CNMI
Dubai, UAE
ProfessionaIAfJiXiatio,..~
American Pl
N ationaL~ ation of Industrial and Office Parks
Greater Tampa Chamber of Commerce - Committee of One Hundr.~q
Tampa Bay Builders Association
Tampa Bay Management Study Commission
Committee, University of Florida, Urban & Regional Planning Departm.e
~
.Centr~ Park
5110 Village
EISENHOWER
BOULEVARD
SUITE 250
TAMPA,
FLORIDA
33634
e
I:ENTEX HOMES
PROJECT HISTORY
· Alafia River - 1,200 Acre Large Lot Residential Community - Hillsborough County
· Apollo Beach - 6,000 Acre Mixed use Community - Hillsborough County
· Arbor Green - 700 Acre Residential Community - Hillsborough County
· Aripeka - 200 Acre Manufactured Housing Community, Hernando County
· Argyle Forest - 9,600 Acre Mixed Use Project - Duval/Clay Counties
· Bardmoor Commercial- 12 Acre Commercial Project - Pinellas County
· Bardmoor Country Club - 900 Acre Golf Course Community - Pinellas County
· Bardmoor Villas - 22 Acre Villa Residential Project - Pinellas County
· Bay Port Colony - 2,300 Acre Mixed Use Community - Hillsborough County
· Bay Port Colony - Various Development Tracts - Hillsborough County
· Bay Vista - 130 Acre Mixed Use Project - Pinellas County
· Baymeadows Center - 4S Acre Commercial/Office Project - Jacksonville
· Beacon Woods East - 700 Acre Residential Community, Pasco County
· Be1fort Station - 320 Acre Regional Mall/Office Project - Jacksonville
· Berlin Bluffs - 92 Acre Single Family Project - Jacksonville
· Big Bend - 3,200 Acre Mixed Us~ Community- Hillsboro~grCotlnr#
· Big Bend Industrial Center - 320 Acre Industrial/Service Center -flill~bo~~l.lghq~(U
· Boot Ranch - 200 Acre Mixed Use Project - Pinellas County
· Breckenridge - 55 Acr~Bl..J~:~~essPark - Hillsborough County
· Brecke creBusiness Park - Hillsborough County
· Buscll ~~~ment Complex, Tampa
· B.. .i. iii . ....:,~iIlsborough County
.~.~l~~i........... . ......<~cJ;~,...i~~e.,:: se Community -Hillsborough County
~C~rin?n ]J80Acre Business Community - Pinellas County
"Cheval ;.. Res~ Components of a 1,500 Acre Golf Course Comm - Hillsborough County
" Christiana Forest - 11 Acre Condominium Project - Jacksonville
· Qitadell &JI - 20 Acre Office Project - Orlando
· Citr~sI.>ar~'l\1,~11 -,:230 Acre Regional Mall/Commercial Center- Hillsborough County
.ColdSPfin~F ~illa~es-, 5,200 Acre Mixed Use Community - Marion County
..QolQl1iaIPenn-'52Acre Office Park - Tampa
· Connerton ,..S,OOOAcre Mixed Use Community, Pasco County
· Cooper Creek - 960 Acre Mixed Use Project - Manatee County
· Corporex - 110 Acre Business Park - Hillsborough County
· County Line Road - 1,000 Acre Golf Course Community, Hillsborough County
· Country Creek - 80 Acre Residential - Putnam County
· Country Hills - 800 Acre Mixed Use Project - Plant City
~
.Cent~ Park
5110 Village
EISENHOWER
BOUlEVARD
surrE 250
TAMPA,
FLORIDA
33634
e
E:ENTEX HOMES
PROJECT HISTORY
continued
· Country Pines - 425 Acre Golf Course Community - Clay County
· Countryside - Various Residential Tracts - Pinellas County
· Creekwood - 980 Acre Mixed Use Project - Manatee County
· Crystal Lake - 12 Acre Condominium Project - Pinellas County
· Cypress Banks - 2,000 Acre Golf Course Community - Manatee County
· Oeira Sea Corniche - 2,500 Acre New Community (Competition)- Oubai, UAE
· OG Farms - 1,400 Acre Mixed Use Project - Hillsborough County
· Dundee Ranch - 360 Acre Residential Community - Hillsborough County
· Dupont Road - 19 Acre Condominium Community - Jacksonville
· Eagle Heath - 650 Acre Golf Course Community - Sarasota
· Eastwood - 960 Acre Residential Community - Hillsborough County
· Eckerd College - 400 Acre Land Use Study - Pinellas County
· Eckerd Corporate Headquarters - 40 Acre Office Project - Pinellas County
· Farms of Kanapaha - 640 Acre Ranchette Community- Alachua County
· Fashion Square - 45 Acre ShoppingC~nter - Tampa
· Fish Hawk Ranch - 5,000 Apesidential New Community -
· Fish Hawk ch - T'Tl enter
· Fletcher A ... h~.B~!." ... .. ... r-f5 Acre Community Shopping Certter-
· Florid~),. . ... :fa~fC~'~terT400 Acre Business Park - HiIlsboroughCounty
· Gamble, re~~ - 1,~00 Acre Golf Course Community TManatee County
· Gat~~aypenter - 900 Acre Mixed Use Project - Manatee County
· Golden Ocala - 500 Acre Residential Golf Course Community, Oca.la
· Golden Ocala - TNO Town Center
· Goodby's Landing - 10 Acre Condominium Project - Jacksonville
· Guest quarters - 5 Acre Hotel- Tampa
I"HarbourIslaf1~ - 155 Acre Iv1ixed Use Community - Tampa
~.fIer~tag~,Sou,1'ld-2;4Qq,A~~~Mixed Use Golf Course Community - Manatee County
· Hunter:~ q~F~nj2,g,Ro Acre Gplf Course Community - Tampa
· Hunter's Ridge..3,000A.FfeB-esidential GolfCourseCommunity, Ormond Beach
· Indian Springs .- 60 Acre Residential Project.; PinellasCounty
· International Village - 95 Acre Apartment Project - Jacksonville
· Interstate Business Park - 140 Acre Business Community - Hillsborough County
· Interstate f;enter - 550 Acre Regional Mall/Business Park - Jacksonville
· Island of Tinian - 15,000 Acre Gaming Resort Community - Tinian, CNMI
· Jack Wright Island - 65 Acre Single Family Residential Project - St. John's Co.
....
.Cent~ Park
5110 Village
EISENHOWER
BOUlEVARD
SUITE 250
TAMPA,
FLORIDA
33634
e
I:ENTEX HOMES
PROJECT HISTORY
continued
· Jacksonville Civic Plaza Area Study - 400 Acre Office Study
· Jacksonville Form & Appearance - City Wide Urban Form Study
· Jacksonville Gator Bowl Area Study - 2,000 Acre Recreational & Entertainment Study &
Master Plan
· Kingsland - 2,000 Acre Golf Course Community - Kingsland, GA
· Lake City Downtown Plan - Mainstreet Redevelopment - Lake City
· Lake Jackson Estates - 900 Acre Single Family Residential Community - Leon Co.
· Lake Tower Place - 10 Acre Office Project - Tampa
· Lakeland City Center - 160 Acre Business Park - Lakeland
· Lakeland Hills Golf & Country Club - 400 Acre Golf Community - Polk Co.
· Lansbrook - 3,000 Acre Golf Course Community - Pinellas County
· Lee Vista (Phase Two) - 900 Acre Business Community - Orlando
· Lexington Park - 9,600 Acre New Town - Polk County
· Mandarin Village - 20 Acre Shopping Center - Jacksonville
· Marshall Creek - 2,016 Acre New Town- St.John's County
· Meridian Park - 125 Acre Residential/Recreation CommunitY-keonCQQllty
· Mount Royal- 320 Acre Residential CommunitY;.., Welaka
· Murphy's Island - 1,086 Acre Second Home Community-g~latk,~
· N. W. 34th Street - 156Acre Patio Home Project - Gainesville
· N. W.16th Avenu~;:20Acre Single Family Residential Project - G:(
· New ge - 2QOAcf~:;:;2ampus Master Plan - Sarasota
· Ne~\\. .... ..~plt:~::2oun(1yClub - 1,800 Acre Golf Cou~se ~8mm - Pasco Co
.1~orthL<lk.e-A.cre Mixed Use Project - Tampa
· North EpIrIte - 20~Acre Office Park - Seminole County
· North TqwnPromenade - 35 Acre Community Shopping Center : Hillsborough County
· Northport - 40 Acre Service Center Project - Hillsborough County
Nqrthwood - 1,100 Acre Mixed Use Project - Pasco County
· Oakfield Station - 8 Acre Office/Commercial Project - Hillsborough County
· On Top Of The World - 13,000 Acre New Town, Marion County
· On Top Of The World- TND Town Center, Marion County
· Orange Park North - 325 Acre Regional Mall/Mixed Use - Clay County
· Palm Aire - 750 Acre Residential Community - Manatee County
· Palms Plaza - 6 Acre Shopping Center - Tampa
· Parkway Centre - 925 Acre Residential Community - Hillsborough County
· Parkway South - 72 Acre Office Park - Ft. Lauderdale
~
.Centr~ Park
5110 Village
EISENHOWER
BOUlEVARD
SUITE 250
TAMPA,
FLORIDA
33634
e
CENTEX HOMES
PROJECT HISTORY
continued
. Pebble Creek - 600 Acre Mixed Use Project - Hillsborough County
. Pinebrook Business Park - 108 Acre Business Park - Hillsborough County
· Port Redwing - 318 Acre Port/industrial Project - Hillsborough County
. Porter Ranch - 5,000 Acre New Town/Golf Course Community - Pasco County
· Providence Center - 75 Acre Mixed Use Project - Hillsborough County
· Regency Springs - 25 Acre Apartment Project - Jacksonville
. Riverside Area Study - 2,000 Acre Neighborhood Revitalization Study - Jacksonville
· Rocky Pointe Centre - 5 Acre Office Project - Tampa
· Rubin Centre - 60 Acre Business Park - Pinellas County
· Rubin ICOT- 270 Acre Business Park - Pinellas County
. Saddlebrook Village - 2,000 Acre Mixed Use Community - Pasco County
. Sebring Golf & Country Club - 600 Acre Golf Course Community - Highlands County
. Seminole Springs - 35 Acre Patio Home Project - Orange Park
· Shadow Oaks - 12 Acre Apartment Project - Tampa
· Silo Bend - 320 Acre Industrial/[),i~,gibutionPark - Hill~b?rough CouI1~
· South County Community Concept+Area wide CompJ?~~I).Amendment
· Southbend - 776 Acre Mixed Use Project - Hillsborough COl,mty
· Spanish Tr~;~<:~30 ~cre ApartmentCommunity - Jacksonville
· SteepleC~~~,~.~F GolfC9urseCommunity - Hillsborough County
· SterlingRAn~1}T.~[~:~i~ed Use Community - Hillsborough County
· Strawbe~..Ridge..315A(:l~~,~ingle Family Residential Project - HillsboroughCounty
· SymmCi!)';;'R,o~d:t4~ reMixed Use Project - HillsboroughCounty
· IP.C. Communit~T;(Pr()posed) - 900 Acre Golf Course Community - St.John's
:,::Tampa Bay Park Phase I & 11- 40 Acre Office Project - Tampa
""Tampa Bay Park Phase III & IV- 36 Acre Office Project - Tampa
· Tampa Technology Park - 1,700 Acre Business Park - Tampa
. Tampa Triangle - 200 Acre Business Park - Hillsborough County
· The Harbour - 400 Acre Residential/Commercial Project - Jacksonville
-The Lakes of St. Lucie- 14,500 Acre New Town - St. Lucie County
· The Landings - 600 ACre Residential Community - Sarasota
· The Ravines -420 Acre Single Family Residential Community - Middleburg
· The Villages - 8,000 Acre Retail and Commercial, Lake County
· Timber Pines - 640 Acre Mixed Use Project - Hernando County
· Thompson-Rubin Center - 60 Acre Distribution Center - Hillsborough County
· Toll Brothers Community - 350 Acre Golf Course Community - Hillsborough County
~
.Centr~ Park
5110 Village
EISENHOWER
BOUlEVARD
SUITE 250
TAMPA,
FLORIDA
33634
e
I:ENTEX HOMES
PROJECT HISTORY
continued
· Tolomato - 490 Acre Single Family Residential Community - Georgia
. Tri-County Business Park - 450 Acre Business Park - Hillsborough County
· Trout River - 285 Acre Apartment/Condominium Project - Jacksonville
· Trout River Estates - 121 Acre Zero Lot Line Residential- Jacksonville
. Turtle Creek - 115 Acre Single Family Residential Project - Hillsborough County
· Turtle Creek - 27 Acre Business Park - Pinellas County
. Twin Banyons - 120 Acre Residential Community - Martin County
· University Collection - 20 Acre Community Shopping Center - Tampa
· University Health Park - 46 Acre Conceptual Master Plan - Tampa
· University Place - 1,300 Acre Business Park - Sarasota County
· University Lakes - 2,400 Acre Mixed Use Community - Manatee County
· Urban Centre - 8 Acre Office/Hotel Project - Tampa
. Village Green West - 360 Acre Mobile Home Community - Indian River
· County Village In The Woods - 135 Acre Apartment/Condominium Project ..,
· Villages of Lake Parker - 3,200 1\5~~~~w Community - Lakeland
· Wedgewood ~plf & CountryCl~?~600 Acre Mixed Use Communit)i(4i~ol~
· Wesley Chapel Lakes - 2,500 ACI~Mixed Use Community, Pasco County
· Westchase - 800 Acre Mixed lJs~:Qommunity - Hillsborough County
~
.Centr~ Park
5110 Village
EISENHOWER
BOULEVARD
SUITE 250
TAMPA,
FLORIDA
33634
e
CENTEX HOMES
FLORIDA DESIGN CONSULTANTS, INC.
Florida Design Consultants, Inc.'s (FDC) staff of engineers, surveyors, transportation plan-
ners, environmentalist and computer graphic technicians have worked together on projects
throughout the Tampa Bay area for many years, and the Clearwater office staff of 35 pro-
fessional and technicians specializes in redevelopment properties, especially those in the
City of Clearwater. Two of FDC's current projects, located less than one mile of the down-
town site, are the IMRglobal Center which is approximately 300,000 sq. ft. of office and a
five level parking structure on 14 acres purchased from the City of Clearwater as a redevel-
opment site in 1998, and the Sunshine Mall redevelopment site on Missouri Avenue
which will contain approximately 600 apartment units and a substantial amount of retail on
35 acres. FDC is also the consultant for JMC Development which is currently redevelop-
ing a site on Clearwater Beach that will contain 157 condominium units.
Some of the projects FDC recently worked on directly for the City of Clearwater include:
~Clearwater Beach Roundabout
~New Bridge for the Memorial C
~Gulf-to-Bay J:3Qulevard ($.
FOC's mos~:ii:~c'~nt project, startedinmid-October, is the design/pfrrnittiOgiof
Improvemel:1ts for approximately one mile of roadways within the (lpwntolVIl Gl~l:l.
area.
EDWARD MAZUR, JR., P.E.,
President of F DC
Managed development/redevelopment projects within the City of Clearwater for more
than 20 years and has an excellent understanding of the new land development code,
adopted in March of this year, that will help facilitate the review/approval ofthe proposed
townhouse development. Mr. Mazur will serve as Principal-in-Charge for any of the work
performed by FDC, and will be supported by Robert Pergolizzi, AICp, VP Transportation
Services, Robert Wright, PSM, VP Surveying and Richard Harris, P.E., Senior Project
Manager, all of them have extensive experience regarding redevelopment projects within
the City of Clearwater. Resumes of these key individuals are attached.
Multi-Family Projects
.
.
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. Single-Family Projects
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CENTEX
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.Centr~ Park
5110 \ lllage
EISENHOWER
BOUlEVARD
SUITE 250
TAMPA,
FLORIDA
33634
e
CENTEX HOMES
FINANCIAL POSITION OF PROPOSER
Centex Corporation was founded in 1950 and is currently a Fortune 500 Company traded
on the New York Stock Exchange (ticker symbol "CTX"). In Fiscal Year 1999, Center had
revenues in excess of $5.1 Billion with total assets of more than $4..3 Billion. 1999 Annual
Reports are included for detailed financial position of Centex and its subsidiaries.
~
. Cent~ Park
... 5110 Village
EISENHOWER
BOULEVARD
SUITE 250
TAMPA,
FLORIDA
33634
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CENTEX HOMES
THE CITY OF CLEARWATER
11,) Whom It May Concern:
This letter will confirm authorization for you to release information regarding the financial
capability of Centex Corporation on a confidential basis to the City of Clearwater. This
information is being provided to the City of Clearwater for the sole purpose of verifying
Centex's financial ability to acquire and develop property currently owned by the City of
Clearwater and further known as the Central Park Village.
Sincerely,
Gente,x Corporation
~
. Centr~ Park
- 5110 Village
EISENHOWER
BOULEVARD
SUITE 250
TAMPA,
FLORIDA
33634
e
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I:ENTEX HOMES
DETAILED PROJECT NARRATIVE
RESIDENTIAL UNITS
A total of 84 Townhomes are proposed in attached rows of various sizes ranging from three
(3) to eight (8) homes. Each unit will be two stories. Virtually, all units will have a two-car
garage accessed from the rear alley. Front doors will either face directly on the street or
have a small five foot to ten foot deep front yard between the door and the street R.o.W
Residential density will be approximately 15.5 units/acre.
AMENITIES
The primary amenities are the urban environment and the Town Pond. Added to these
site features will be a pool and mini parks.
The "urban" amenity will include close proximity to jobs, retail and service needs and cul-
tural/civic events associated with Downtown Clearwater.
In addition to the views created by the Town Pond, the public sidewalk/trail around
pond will be an attractive recreation facility for walking, jogging, etc.
The pool and sundeck will .
restrooms and changing areas for project residents.
Three mini parks, or "vest pocket parks" are proposed. They are distributed
site to make them easily available for all project residents. Each one fronts on
Pond. They are quiet passive areas with seating for quiet contemplation or social
tion with nei e;hbors.
TOWN POND
As mentioned earlier, the Town Pond will be an important amenity to the residents.
Project internal sidewalks will access the public sidewalk/trail around the Town Pond at
several points, making the Town Pond a recreation facility as well as providing a positive
Image.
STREETSCAPE
The project is planned in a "Traditional Neighborhood Development" (TND) form.
This is a very urban style of development. The Townhomes will be pushed up very close
to the street R.O.W. Sidewalks will be located in front of all units. Street trees will be
added to provide shade to the sidewalk and as a visual buffer to the street traffic. On street
parallel parking is an important part of the TND streetscape and will be included on at
least one side of each street. A typical section of the proposed streetscape follows.
~
.Centr~ Park
5110 Village
EISENHOWER
BOULEVARD
SUITE 250
TAiVlPA,
FLORIDA
33634
e
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CENTEX HOMES
DETAILED PROJECT NARRATIVE
continued
VEHICULAR CIRCULATION
The project vehicular circulation includes a combination of the following:
~ EXISTING STREETS THAT REMAIN PUBLIC.
These streets include Cleveland Street, Pierce Street, and parts of Park Street.
~ EXISTING STREETS THAT ARE "BEHIND THE GATE".
These streets include parts of Prospect Avenue and Ewing Avenue.
~ NEW STREET
"Street A" as shown on the attached Preliminary Site Plan will be a new street connecting
Ewing Avenue with Prospect Avenue above the Town Pond.
~ ALLEYS
All the proposed alleys are new. They typically are 30' wide for two-way traffic and
wide for one way traffic. The one way configuration only occurs intne shott:section
alley parallel and north of Pierce Strystwhere the property depth IS very restrictiv~.
All streets and alleys are designed to
30' inside radius.
PEDESTRIA~ CIR
All homes Will directly front on a sidewalk. All sidewalks lead to adjacent retail/service
businesses, the pooL mini parks, and the Town Pond. Street trees will be planted within
the project to add shade to the sidewalk.
SECURITY
Portions of the project will be secured by a manned and/or card access gates. While most
of the "front doors" of the Townhomes will front on an ungated public street, the alleys
will be accessed through a gate. To reduce the number of gates, some homes will be com-
pletely behind the gate. Pedestrian access will also be gated.
~
.Central Park
.. 5110 Village
EISENHOWER
BOULEVARD
SUITE 250
TAMPA,
FLORIDA
I:ENTEX HDMES
DETAILED PROJECT NARRATIVE
continued
PARKING
Virtually, all of the Townhomes will have a two car garage intemal to the home and
33634 accessed from a rear alley. Visitors and some residents will use on street parking directly in
front of their home. On street parking is, at least on one side, is planned for all streets. At
the present time six units are planned without the garage due to site limitations. All of
their parking will be on street. There are three areas at wider parts of the alley to park
bulky vehicles including boat trailers and RV's.
e
INFRi\STRUCTURE
All utilities are understood to be available either in the existing street, or, in the case of
drainage, the Town Pond expansion will handle drainage. Although portions of some
streets are proposed to be closed for security purposes, no buildings are planned within the
RO.W.'s. Existing utilities will remain. Easements will be granted for continued
mamtenance.
COMPATIBILITY
The proposer is reintroducing residential uses to an area of retail, service (including auto)
and warehouse/distribution uses. The improvement of the area's image, by the extensiqn
of the To:yn POl1,Q,Tak~~ithis possible. But there will be areas of conflict between adjacent
uses. The propose has shown walls along all internal property lines both for security and
for buffers against adjacent uses. Along streets and the Town Pond no buffers are pro-
posed. Wrought iron fencing will be used for security purposes.
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TAMPA,
FLORIDA
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CENTEX HOMES
FINANCIAL PLAN
The following table represents the estimated value of Central Park Village to be
$9,072,000 annually. There are no financing contingencies associated with this proposal.
Centex Corporation, through its Financial Services Group, which includes
CTX Mortgage, has the financial resources to provide all capital required for the
development of Central Park Village,
~
.Centr~ Park
5110 Village
EISENHOWER
CENTEX HOMES
BOULEVARD
CITY OF CLEARWATER · CENTRAL PARK VILLAGE
SUITE 250
TAMPA,
Total Number of Units
84
FLORIDA
33634
Avera,R"e Sales Price of Units
$135,000
Less Homestead Exemption
$27,000
e
Assessed Value per Unit
$108,000
Total Annual Assessed Value
$9,072,000
Contents
CENTEX CORPORATION, through its subsidiaries, continuously ranks among
America's premier companies in the Home Building, Financial Services,
and Contracting and Construction Services industries. Centex also has an
Investment Real Estate operation and is the majority owner of a publicly
held Construction Products company. Centex is also expanding its Home
Services and Senior Services operations.
In addition, with its recent acquisition of a home builder in the
united Kingdom, Centex has become the first u.S. company to enter the
European housing market.
HOME BUILDING CENTEX HOMES is one of the nation's largest on-site
builders of single-family homes. CAVCO INDUSTRIES, LLC is the leading
manufactured home builder in Arizona and New Mexico and ranks fifteenth
in the U.S.
FINANCIAL SERVICES CTX MORTGAGE COMPANY ranks among the top five
independent retail mortgage originators in the U.S. CENTEX HOME EQUITY
CORPORATION is the nation's thirteenth largest retail sub-prime mortgage
originator and twenty-sixth largest sub-prime lender in the U.S. Centex
also offers title and insurance services.
CONTRACTING AND CONSTRUCTION SERVICES CENTEX CONSTRUCTION GROUP
consistently ranks among the nation's leading general building contractors.
INVESTMENT REAL ESTATE Centex's Investment Real Estate division
operates under the names of CENTEX DEVELOPMENT COMPANY, INC. and
CENTEX MULTI-FAMILY COMPANY.
CONSTRUCTION PRODUCTS Centex owns approximately 61% of CENTEX
CONSTRUCTION PRODUCTS, INC. (NYSE: CXP), a publicly held producer of
Cement, Gypsum Wallboard, and Concrete and Aggregates.
CENTEX DEVELOPMENT COMPANY, L.P. (CDC) is a master limited partnership
created by Centex in 1987 to conduct real estate activity. Ownership
interests in CDC, a separate entity from Centex, currently trade in tandem
with the common stock of Centex Corporation. This combined 1999 Annual
Report consists of the Annual Report to Stockholders of Centex Corporation,
3333 Holding Corporation and Centex Development Company, L.P.
Financial Highlights 1
Stockholders' Letter 3
Review of Operations 9
Financial Information 25
Corporate Information 84
Centex Corporation ond subsidiories
. FINANCIAL HIGHLIGHTS
(Amounts in thousands, except per shore data)
For the Years Ended March 31,
1999 1998 1997 1996 1995
Revenues $5,154,840 $3,975,450 $3,784,991 $3,102,987 $3,277,504
Earnings Before Income Taxes $ 373,294 $ 231,634 $ 163,743 $ 87,786 $ 145,788
Net Earnings Before Gain on
Construction Products IPO $ 231,962 $ 144,806 $ 106,563 $ 53,365 $ 54,753
Gain on Construction
Products IPO 37,495
--
Net Earnings $ 231,962 $ 144,806 $ 106,563 $ 53,365 $ 92,248
Earnings Per Share - Diluted
Before Gain an Construction
Products IPO $ 3.75 $ 2.36 $ 1. 80 $ .91 $ .90
Gain on Construction
Products I PO .61
--
$ 3.75 $ 2.36 $ 1. 80 $ .91 $ 1. 51
Cash Dividends Per Share $ .16 $ .135 $ .10 $ .10 $ .10
Average Shares outstanding -
Diluted 61,854 61,265 59,259 58,582 61,054
stockholders' Equity $1,197,639 $ 991,172 $ 835,777 $ 722,836 $ 668,227
Book Value Per Share
. at Year End $ 20.17 $ 16.65 $ 14.40 $ 12.72 $ 11.90
STOCK PR.ICES AND DIVIDENDS
Year Ended March 31, 1999 Year Ended March 31, 1998
Price Price
High low Dividends High low Dividends
QUARTER
First $40'1. $33 $.04 $21'1, $16'1, $.025
Second $44'1. $33 $.04 $29'1" $20'1" $.035
Third $45'1. $26 $.04 $ 3 27/" $28'1" $.035
Fourth $45'1. $30'1. $.04 $40'1, $297/. $.04
.
The common stock of Centex corporation is traded on the New York stock Exchange (ticker symbol CTX) and The london stock
Exchange Limited. The opproximate number of record holders of the common stock of Centex Corporation atJune 1, 1999 was
2,912.
On November JO, 1987, Centex corporation distributed as a dividend to its stockholders securities relating to Centex
Development Company,LP. (See Note F to the financial statements). since this distribution, such securities have traded in
tandem with, and as a part of, the common stock of Centex corporation.
Amounts represent cash dividends per share paid by Centex corporation on the common stock of Centex corporatian.
JJJJ Holding corporation has paid no dividends on its common stock since its incorporation.
o
.
.
.
Centex made great strides in fiscal 1999-financially, operationally and
strategically. Net earnings reached an all-time-high $232.0 million, 60%
higher than $144.8 mill ion la st year a nd a 118% improvement ovel' fiscal 1997
earnings of $106.6 million. Fiscal 1999's record earnings per share reached
$3.75, 59% higher than $2.36 in fiscal 1998 and 108% above $1. 80 per share
just two years ago. Fiscal 1999 revenues also reached a new level, toPpin9
$5 billion for the first time.
SIGNIFICANT INCREASES. Everyone of the Company's divisions registered
earnings gains. Centex Homes' profits rose more than 42% as it achieved dra-
matic increases in home deliveries and margins. CTX Mortgage Company had a
record year, leading Financial Services to a 194% earningsimprofement;
Centex Home Equity corporation, the Company's sub-prime lender, contributed
to this gain, recording its first profitable year.
The earnings from our 61% interest in Centex Construction Products,
Inc., our publicly traded affiliate, increased by 45%. Centex Co nstruction
Group, validating its reputation as one of the nation's premier qeneral con-
tractors, more than doubled its earnings. Cavco Industries' manufactured
housing profits increased by 17%, and Centex's Investment Real:state Group
also made a significant contribution to our financial results.
By fisca I yea rend, Centex stockho I d ers' eq u i ty h ad rise n to ~~ 1. 2 bi Ilion
while the Company's debt-to-capitalization ratio remained at a c;onservative
29.5%. Centex's return on beginning stockholders' equity was 23.4%,
the highest such return for the Company since the 1970's.
During most of the year, investors reacted enthusiastically to our finan-
cial performance, driving the Centex stock price to an all-time high of
$ 45.7 5 per share on December 31, 1 9 9 8. Un for tun ate I y , as calendar 1 999
o
began, investors began searching the horizon for a recession that never
seemed to appear, and our fiscal 1999 year-end stock price was below last
year's level.
CREATING A WORLD LEADER. Even as our earnings have been escalating, Centex
has been taking the steps necessary to realize our longer-term goal of
becoming the World Leader in Housing and Housing Services. Achievement of
this goal will have a profound impact on Centex. We will have the ability
to move capital among regions, industries and, indeed, countries, to
aggressively take advantage of opportunities in a way no company in our
businesses has been able to do before. In the future, Centex's earnings
should be considerably higher and less tied to the u.s. housing cycle.
To accomplish this objective, Centex must be capable of providing excep-
tional products and services in a wide variety of markets, both here and
abroad; be able to attract and retain the best people in our industries; and
be a disciplined investor, demanding high returns on our investments.
This last point is particularly important. Centex intends to achieve World
Leader status without compromising financial discipline. The Company's drive
to increase profits at a minimum compounded annual growth rate of 15%
(that's below our historical performance) while moderating earnings cyclical-
ity will not be diminished as we travel toward this unique destination.
Centex's recent history provides an excellent road map to some of our
philosophical guideposts: we recognize that in our businesses operational
Revenues
($ in millions)
Net Earnings
($ in millions)
99
$5,155
99
$232.0
98
$3,975
$144.8
98
97
$3,785
97
$106.6
96
$3,103
$53.4
96
95
$3,278
Ell
$92.2
95
. Gain on sale of 51% of
Centex Construction Products, Inc.
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.
.
.
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excellence is the key component to success; we favor internai growth and
acquisitions that create expandable strategic bases over headl:ne-making
mega-transactions; and we are dedicated to continually broadening the scope
of the Company's housing products and related services.
For the past five years, Centex Homes has focused on margin improvement,
lowering its construction costs every year despite battling inflationary increas-
es. Today Centex Homes is again increasing its home deliveries, wrich should
grow significantly in fiscal 2000. Three home building acquisitions were complet-
ed this year for a combined purchase price of $124 million. We exp anded the
company's operations in central New Jersey and Richmond, Virginia and added a
new product capability through the purchase of Ohio-based Wayne Homes, which
builds affordable houses primarily in rural locations on customer-owned land.
le
GOING GLOBAL. Shortly after the end of the fiscal year, Centex became the first
U. S. bu i Ider to enter the United Kingdom's hou si ng market with em affiliate's
acquisition of Fairclough Homes, which builds approximately 1, 7eo homes
annually. The approximate $225 million purchase price was paid through the
issuance of zero-interest two-year notes. This innovative structut'e permits the
seller to retain almost all of Fairclough's earnings for two years while Centex
assumes overall management control, ensuring that Fairclough will meet
Centex's financial performance standards by the time the note~ are funded.
The Fairclough purchase will serve as the base for Centex's strategy of
becoming the first pan-European housing company.
shores outstanding at Year End
(in millions)
Earnings Per Shore - Diluted
(in dollars)
99 59.4
98 59.5
97 58.0
96 56.8
Ie 95 56.2
99
$3.75
98
$2.36
97
$1.80
96
$.91
95
..
$1.51
. Gain on sale of 51 % of
Centex Construction Products, Inc.
o
CONTROLLED EXPANSION. During the year, Cavco Industries, the Company's
manufactured housing arm, successfully initiated operations at its fifth
plant, expanded its retail network, began incorporating the products of our
in-house manufactured housing lender into its retail sales process, and
opened Centex's first manufactured housing "for sale" community. Invest-
ment Real Estate started $64.3 million of projects during fiscal 1999,
including office buildings, warehouses and apartments.
CTX Mortgage doubled its loan volume to $10.1 billion in fiscal 1999 and
raised its per-loan profit to the highest level in five years, while adding
telemarketing, specialty products and wholesale operations to expand its
mortgage origination channels. Home-grown Centex Home Equity doubled its
loan originations to over $1 billion, extended its loan office network, and
completed $890 million of mortgage securitizations, enhancing its growing
reputation as one of the few remaining high-quality non-bank lenders in
the sub-prime mortgage business. Our Title and Insurance operations were
broadened with the acquisition of Westwood Insurance, one of the
nation's largest brokers of homeowners insurance for new home buyers.
Centex Construction Products increased capacity while reducing produc-
tion costs at its plants, even as prices for its Cement, Gypsum Wallboard
and Concrete and Aggregates products continued to rise. Centex Con-
struction Group recorded its highest operating profit in a decade and con-
tinued to solidify its management teams as it prepares to pursue strategic
growth initiatives.
stockholders' Equity
($ in millions) Total Debt to Capitalization ($ in millions)
$1,198 99 29.5%
$991 98 III 20.3%
$836 97 . 20.9%
$723 96 .. 35.6%
$668 95 .. 38.0%
. Debt
Capitalization
99
98
97
96
95
0)
.
.
.
.
.
.
Centex's younger operations are setting their own pace. Centex
HomeTeam Services, our electronic Security, Pest control and Lawn Care oper-
ation, has added management capable of making Centex a major provider
of those services to homeowners. As we began to focus on the care-based
housing market, we opened and are operating two Kensington Cottages by
Centex, which are specially designed facilities for residents with Alzheimer's
disease and related memory impairments.
CENTEX PEOPLE. It is important to recognize the people who lead the way for
Centex. Particularly notable is the selection of Tim Eller, Chair'man and
Chief Executive Officer of Centex Homes, as 1998 "Builder of the Year" by
Professional Builder magazine. This award honors the efforts of all of the
people of Centex Homes, acknowledging not only the company's superb
financial performance, but, more important, the quality of the houses that
the people of Centex Homes are building in 64 markets.
Just as rewarding is the personal commitment of Frank Eller (no relation
to Ti m t ha t we know of), who, as descri bed I ate r in this report, is lead i ng
Centex Rooney Construction Company's efforts to help build a haven for
critically ill children. Frank is a special example of the many Centex employ-
ees who give back to the communities where they live and work.
Many other people have contributed to Centex's success. [n particular,
we will miss the advice and counsel of Dr. Alan Coleman, who is retiring
aft e r 20 yea r s a saC en t ex D ire c tor. 0 n a sad d ern 0 t e, J. C. H ,= yw 00 d ,
Chairman of Financial Services, passed away a few short months after he
joined Centex - a tragedy for his family and for all of us.
VIBRANT AND GROWING. Centex enters fiscal 2000 with excellent short-term
prospects and enormous longer-term opportunities. Our drive to create the
world Leader in Housing and Housing Services will keep Centex vibrant,
growing and many steps ahead of our peers.
0( ~ tL~
~~
Laurence E. Hirsch
David W. Quinn
Chairman and Chief Executive Officer
vice Chairman
May 12, 1999
o
.
.
During fiscal 1999, Centex continued to distinguish itself as the nation's most
versatile provider of housing products and related home services. Centex Homes
re-established top line growth, even as it again produced record bottom line
results. Cavco Industries completed its first manufactured housing plant in
Texas and continued to integrate production, retail sales, mortgage financing
and community development operations. Centex HomeTeam services further
extended its network of housing-related services, as it develops a recurring,
non-cyclical stream of revenues and earnings. Centex's senior Services division
is creating a core group of care-based assisted living facilities for people
with Alzheimer's disease and related memory impairments.
,. Increased Centex Homes
deliveries to an all-time-high
14,792 homes and reported
earnings of $242.2 million,
marking its third straight
record year; achieved higher
gross and operating margins
and return on assets.
,. Deliver a record 17,000 homes
in fiscal 2000, while again
increasing margins and report-
ing significantly higher
earnings.
" Cut direct construction costs
to 58% of revenues - lowest
level since the 1980's-
through improved efficiencies
in estimating, purchosing,
land acquisition, development
and labor.
,. Reduce direct construction
costs further through value
engineering, design efficien-
cies, improved estimating
and purchasing techniques,
and field execution.
.
o
London-based
Fairclough Homes,
Centex's newest
home building acqui-
sition, builds houses
that range in size
from 800 to 2,500
square feet and
sell for an average
price of approxi-
mately $185,000.
'*' Expanded geographically.
Entered Richmond, Virginia mar-
ket with the acquisition of Teal
Homes. Added strategic opera-
tions in New Jersey and estab-
lished foothold for further
expansion in the northeast
with Calton Homes acquisition.
'*' Grew within existing markets,
increasing neighborhoods
by 17%.
'*' Entered "build-on-owner's-
lot" market segment with
purchase of Ohio-based Wayne
HOmes; added active adult
and senior-oriented communi-
ties; extended affordable
entry-level products into most
of our markets.
'*' Became first u.s. home
builder to enter U.K. housing
market with acquisition of
london-based Fairclough
Homes by a Centex affiliate.
Investigated potential latin
American home building opera-
tions, particularly in
Argentina, Brazil and Chile.
Continued to participate as
joint-venture partner in
Mexico City development.
New Habitat for Humanity homeowners Dalia
and Blanca Botello are congratulated by
Fox /; Jacobs employees Brian swindell
and Gene Skrabanek, who led Centex's
Habitat building effort in Dallas this
year. Centex Homes supports Habitat for
Humanity on a nationwide basis.
'*' Identify and enter new
geographic markets either
through start-up operations
or by acquisition.
'*' Increase share of existing
markets. Pending acquisition
of the suburban assets of
Sundance Homes will signifi-
cantly expand our presence in
the important Chicago market.
'*' Expand in segments that
have favorable demographics,
including active adult,
urban, second home/resort
and recreational markets.
'*' Pursue additional invest-
ment opportunities in Europe
and latin America.
@
.
.
.
.
.
le
phoenix-based Cavca
Industries is the
largest producer of
manufactured homes
in Arizona and New
Mexico as well as the
nation's largest pro-
ducer of 400-squore-
foot "park model'"
homes used in recre-
at/anal vehicle parks.
@
,. continued to install the
operational infrastructure that
will ultimately support the
delivery of 25,000 homes
annually.
,. Completed first manufactur-
ing facility in Texas, near
San Antonio, in late fiscal
1999, bringing the total num-
ber of Caveo's manufacturing
plants to five.
,. Expanded Cavco Retail Group
through acquisition and inter-
nal development of dealers in
south central Texas and New
Mexico. At fiscal year end, had
15 active retail locations and
seven more pending.
,. Incorporated Centex's new
manufactured housing finance
arm, Cent ex Finance Compony
(CFC), into its operation; CFC
currently provides lending for
approximately 30% of the
Cavco Retail Group's customers.
,. Opened Centex community
Development's first "for sale"
manufactured housing commu-
nity in Rio Rancho, New
Mexico, near Albuquerque.
,. will progressively grow toward
that level.
,. Raise fiscal 2000 earnings
over the prior year's results,
benefitting from Cldditional
production from new Texas
facility; add other facilities
as appropriate.
,. Add retail locations In key
markets.
,. Expand Centex Finance
Company's share of Cavco's
retail business.
,. Open additional Centex
Community Development neigh-
borhoods in New Mexico and
Arizona.
,I
" Provided electronic Security,
Pest Control and Lawn Care
services to approximately
125,000 customers.
" Grow customer base to size
that will drive earnings to
breakeven point near-term and
produce substantially higher
profits in the future.
" Added significant manage-
ment resources at both
corporate and division levels
in all three businesses;
made investments to create
"critical mass" in each.
" Commit additional resources
and make investments that will
position the division to
exceed its longer-term plan.
" Sold non-strategic multi-
family Security operation
in late fiscal 1999 to focus on
more profitable single-family
business; sale resulted in 40%
return on three-year invest-
ment.
" Focus on high-return, single-
family Security business for
both new and existing homes.
" Acquired 14 conventional
Pest Control companies by fis-
call999 year end to comple-
ment the company's Pest
Defense System@ "Tubes in the
Wall" installed only in homes
under construction.
" Create premier Pest Control
and Lawn Care companies.
Rob wildes of Centex HomeTeam
Pest control installs our
patented Pest Defense 5ystem@
"Tubes in the Wall" in a home
during construction. The system
uses perforated tubing to
deliver pest control materials
inside building walls.
@
.
.
.
.
.
.
" Began "bundling" home
services and marketing them
to customers of Centex Homes
and CTX Mortgage. Currently
offering Security installation
and monitoring in 13 Centex
Homes divisions, Pest control
services in 23 divisions,
and Lawn Care in 14 divisions.
" Expand service "bundling"
to more Centex customers;
also offer "bund'led" services
to other home builders and
employers.
Centex has complet-
ed and is operating
its first 28-bed
Kensington Cottage
in Round Rock, Texas.
A second facility,
located in League
City, Texas, opened
shortly after fiscal
year end. The
Cottages offer a
small home environ-
" Completed first two 28-bed
Kensington Cottages, specially
designed facilities for patients
with Alzheimer's disease
and related memory impair-
ments, both in Texas. First
facility, near Austin, is already
50% occupied and operating
at breakeven; second, near
Houston, opened shortly after
1999 fiscal year end.
ment with land-
scaped walking
trails, garden areas
and a location in a
residential area.
@
" Complete conshuction of
third facility in Amarillo, Texas
later in fiscal 2000. These
three facilities will serve as a
basis for Centex's evaluation
of Kensington's potential in
the emerging field of care-
based housing.
.
.
.
The operations of Centex's Investment Real Estate Group include the acquisition,
development and sale of land, and the development of industrial, retail, single-
family, multi-family, office and other commercial projects. The Group currently has
a u.s. land portfolio of approximately 2,200 acres of substantially developed
mixed-use properties. The Group's operating earnings also include Centex's equity
in the operating earnings of Centex Development Company, L.P.
" Reported slightly higher
earnings in fiscal 1999 than in
fiscal 1998.
" Report fiscal 2000 earnings
about equal to those of fiscal
1999.
" Initiated approximately $64
million of new commercial
and multi-family projects dur-
ing the year; delivered 73
homes through its New Jersey
home building operotion.
" Begin constructing about
$80 million of new projects in
fiscal 2000, including office,
retail, industrial and multi-
family; deliver 75 homes in New
Jersey.
" utilized the services of
Centex's home building,
construction, home services,
and title companies in its
development activities.
" Benefit from synergies with
our home building, construc-
tion, title, insurance and home
services operations; expand
into development of mid-size
master-planned communities.
" Acquired, after fiscal year
end, a significant U.K. home
builder - London-based
Fairclough Homes - that builds
opproximately 1,700 homes
annually.
" Take immediate management
control of Fairclough; reposi-
tion operation so torget
returns can be achieved follow-
ing the two-year transition
period.
" Purchased 49.9% of Nomas
Corp., which owns properties in
California, Texas and Washing-
ton, D.C.
@
" continue to develop and
market the acquired Nomas
properties, which have signifi-
cant profit potential.
, 1----
.. ~
---~
The Centex Financial Services Group (CFS) is a major national provider of a variety
of housing-related financial services. Through its network of more than 425
offices, CFS offers "A" mortgages, home equity and sub-prime loans, mortgages
for buyers of manufactured homes, title policies, and numerous insurance prod-
ucts, for both Centex Homes and non-Centex Homes customers. Centex Technology
provides a variety of services to the mortgage industry.
.
" Originated a record $10.1
billion of mortgages and
increased CTX earnings 144%
over last year, due to strong
housing market and surge
in refinancings.
" Report even better results
from CTX in fisccil 2000 than in
1999, if rates remain at rela-
tively low levels.
. Expanded CTX bronch net-
work to 251 offices, primarily
in the midwest. northeast
and southwest. a 25%
increose over fiscal 1998.
" Continue to expand branch
office network, adding 10%
to 15% more locations in fiscal
2000.
. Grew Rffilioted Business
Rrrongement (RBR) portner-
ships. which provide mortgage
services to other builders,
to 21 operations. generating
6.222 loans valued at $891
million during fiscal 1999.
.
17
'~
.. Increase RBR business
extensively; number of part-
nerships expected to at least
double during fiscal 2000.
Centex Home Equity
has established a
substantial presence
in Texas since home
equity lending was
permitted in the state
for the first time in
January 1998. CHEC's
!~Texas delegation"
includes, from left:
Underwriting Supervi-
sor Sophia Brooks;
Regional Vice Presi-
dents Doug Campbell
and Joe Cutrona, and
Vantha Eang, Closing
Supervisor.
i!;
* Laid groundwork for signifi-
cant new loan acquisition
channels, including specialty
wholesale, regular wholesale,
telemarketing, relocation
services, affinity marketing
with other employers, and
"con st ru cti 0 n/pe rm a n e n t"
lending programs.
* Reported a solidly profitable
year in fiscal 1999, CHEC's
third year of existence, earn-
ing $9.7 million versus a loss
of $8.3 million last year.
originated over $1 billion of
loans, more than twice last
year's total.
* Expanded scope of retail
and broker referral loan origi-
nation channels, growing
to 124 locations doing busi-
ness in 48 states.
* Securitized $890 million of
mortgages and created a high-
ly experienced servicing oper-
ation; at fiscal year end was
servicing
17,600 loans
representing a
total portfolio
of $1.2 billion.
* Expand loan acquisition
channels and add others as
appropriate to help offset
decline of loan refinancings.
I
* Report increasingly higher
earnings while continuing
to use conservative loan secu-
ritization reporting assump-
tions; originate approximately
$1.3 billion of loans in fiscal
2000.
* Expand retail and broker
network into new geographic
areas; selectively add person-
nel and branch operations
available due to industry con-
solidation.
* Continue to securitize loans
on a quarterly basis; loan
securitizations should surpass
$1 billion in fiscal 2000.
@
.
.
.
.
.
.
" Joined with CTX Mortgage,
Centex Homes and Centex
HomeTeam Services in a
national marketing effort to
"bundle" products for Centex
customers and third parties.
" Creoted Centex Finance
Company to support the
expansion of Caveo into retail
distribution.
" Reported most profitable
year ever for these opera-
tions, eorning $4.7 million.
" Acquired California-based
Westwood Insurance, a full-
service insurance broker
specializing in homeowners
insurance for the home build-
ing industry. westwood
currently provides insurance
services to Centex and 120
other clients in 31 states.
;; Took advantage of Centex's
expansion into new real
estate areas, closing title on
the sale of Centex Develop-
ment properties and on loans
for Centex Home Equity.
~.
19
.~
" Take advantage of new
opportunities for business
generated by cross-selling
activities with other Centex
companies.
" continue to provide cus-
tomer financing to support
Caveo's expansion into retail
distribution and olso service
independent deal,ers in
Arizona, New Mexico,
colorado, NevadCl and Texas.
" Increase earnings progres-
sively.
" continue to expand insur-
ance business within the
Cent ex Homes organization as
well as with other builders;
increase commercial insurance
business.
;; Create new business oppor-
tunities with other Centex
companies, particularly by
expanding title business into
additional states.
.
.
.
* Report a sixth consecutive
year of record results for CXP
in fiscal 2000.
Centex Construction Products, Inc. (CXP), one of the most diverse publicly held
construction products companies, operates in the Cement, Gypsum Wallboard and
Concrete and Aggregates industries. In fiscal 1999, CXP, which is curt'ently 61%-
owned by Centex Corporation, celebrated five years as a separately traded public
company by achieving a fifth consecutive year of record financial performance.
CXP was recognized in the March 1999 edition of International Cement Review as
having the highest return on gross assets - 25.2% - in the industry worldwide.
* Reported historically high
revenues, margins, earnings
and returns for fiscal 1999.
* Spent $33.8 million to
upgrade facilities and equip-
ment and increase operational
efficiency. Expanded capacity
at the Eagle Gypsum Wallboard
plant by 60%, at the
Albuquerque Wallboard plant
by 23%, and at the Illinois
Cement plant by 15%.
* sought acquisition opportu-
nities. CXP is virtually debt-
free and has a significant
cash position.
* Repurchased nearly two mil-
lion shares of stock during
fiscal 199, for a total of
about $72 million, reflecting
Cxp's continuing confidence in
its future performance.
3
* Enjoy benefits from the
three completed expolnsions
beginning in fiscal 2000.
* Take advantage of acquisi-
tion potential in Aggregates
area. Recent passage of
TEA-21 (Transportation Equity
Act for the 21st century)
should increase the nation's
infrastructure spending by over
40% during the next six years.
* continue to repurchase
shares; 922,500 shores
remain under the cUI'rent
authorization.
.
.
.
The Centex Construction Group (CCG), which consistently ranks as one of the
nation's largest general building contractors, has four major subsidiaries.
Centex Construction Company, with significant operations in both Dallas, Texas
and Washington, D.C., is a formidable competitor on negotiated contracts In
both areas. Centex Rooney Construction Company, headquartered in Ft.
lauderdale, Florida, is the state's largest general contractor and is expanding
rapidly in the educational facility construction market. Nashville, Tennessee-
based Centex Rodgers Construction Company is a major force in healthcare
facility construction. Centex Forcum lannom, headquartered in Dyersburg,
Tennessee, is gaining an increasing share of industrial contracting work in its
core southeastern market area and in the midwest.
. Improved margins at all major
subsidiaries and each was
profitable in fiscal 1999.
Group earnings more than dou-
bled last year's results,
reaching their highest level in
more than a decade.
. continue to improve CCG
earnings significantly in fiscal
2000 and beyond.
. Was awarded an additional
$1 billion-plus of new con-
tracts that are expected to
be signed during fiscal 2000.
. Maintain current revenue
levels over the next two years
from contractual and "shad-
ow" backlogs.
. Pursued higher-margin
negotiated projects that have
a more favorable risk/reward
relationship than public-bid
work; at fiscal year end, 90%
of CCG's backlog was negoti-
ated work.
. Continue to focus on
negotiated and design/build
projects to maintain higher
margin levels.
@
Centex Rooney Construc-
tion Manager Frank Eller
helps make dreams come
true for children with
life-threatening illnesses
at Give Kids the World
(GKTW) Village near
Orlando, Florida. Over
several years, Frank has
supervised the construc-
tion efforts of 10 build-
ing and contracting
companies at the Village.
The current 16-acre GKTW
expansion, which will be
completed later this year,
will enable the Village to
provide more than 7,000
families annually with
a memorable all-expense-
paid week of fairy-tale
experiences. Centex
Rooney employees and
vendors have donated
much of the construction
services and the materi-
als needed to create
the Village.
'" Enhanced industry-specific
expertise and expanded skill
base in healthcare, educa-
tion, hospitality and industri-
al markets. Added related
value-added services, such
as facilities management,
developer assistance and hos-
pital relocation.
'" Add more related services to
differentiate CCG from its
competition; identify oppor-
tunities to expand into addi-
tional regional markets.
'" Focused on repeat relation-
ship clients in less cyclical
businesses; contracts from
these clients represent 60% of
current revenues and backlog.
'" Cultivate clients who gener-
ate construction projects in
all economic climates.
.
.
.
@
Centex Corporation and subsidiaries
(Va liars in thousands)
CONSOLIDATED REVENUES AND OPERATINC EARNINCS BY LINE OF BUSINESS
1999
REVENUES
Home Building
Conventional Homes
$2,819,442
550/0
178,556
30/0
33,694
10/0
436,299
80/0
336,073
70/0
Manufactured Homes
Investment Real Estate
Financial Services
Construction Products (R)
Contracting and
Construction services
1,350,776
260/0
$5,154,840
1000/0
OPERATING EARNINGS
Home Building
Conventional Homes $
242,223
550/0
10,253
20/0
29,420
70/0
92,309
210/0
69,189
160/0
Manufactured Homes, net (e)
Investment Real Estate
Financial Services
Construction Products, net (R) (e)
Contracting and
Construction Services
15,209
30/0
(15,624)
(4%)
442,979
100%
other, net
OPERATING EARNINGS
Corporate General and
Administrative
Interest
Earnings Before Gain on
Construction Products's
IPO and Income Taxes
Construction Products's
IPO Gain
EARNINGS BEFORE
INCOME TAXES
28,104
41,581
373,294
$ 373,294
1998
$2,312,045
58%
140,621
4%
25,403
1%
246,278
6%
297,322
7%
953,781
24%
$3,975,450
100%
$
170,531
60%
8,741
3%
28,231
10%
31,371
11%
47,746
17%
For the Years Ended March 31,
1997
$2,299,592
61%
-%
9,032
-%
168,722
5%
239,380
6%
1,068,265
28%
$3,784,991
100%
$
144,043
67%
1996
$1,989,929
64%
-%
-%
129,546
4%
-%
983,512
32%
$3,102,987
100%
$
106,695
74%
7,152
2%
(7,621)
(3%)
286,151
100%
21,261
33,256
231,634
$ 231,634
-%
17,896
8%
24,410
12%
32,716
15%
(2 , 1 83)
(1%)
(2,260)
(1%)
214,622
100%
16,817
34,062
163,743
$ 163,743
-%
-%
17,155
12%
25,628
18%
(4,995)
(3%)
(866)
(1%)
143,617
100%
14,969
40,862
87,786
$
87,786
Applicable segment overhead costs have been deducted from lines of business operating earnings.
1995
$2,110,735
65%
-%
-%
106,841
3%
-%
1,059,928
32%
$3,277,504
100%
$
112,149
83%
-%
-%
9,399
7%
16,577
12%
(1,790)
(1%)
(1,608)
(1%)
134,727
100%
15,253
33,014
86,460
59,328
$ 145,788
(A) As a result of Centex Construction Products, Inc.'s ("Construction Products") repurchases of its own stock during the
June :30, 1996 quarter, Centex's ownership interest in Construction Products increased to more than 50% (60.6% os of March
:31, 1999). Accordingly, beginning with the quarter ended June :30, 1996, Construction Products's financial results have been
consolidated with those of Centex and are reflected in Centex's revenues and operating earnings. In order to facilitate
comparisons between years, Construction Products's operating earnings have been reflected net of minority interest. Had
Construction Products's revenues 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, :31:3, respectively.
(8) operating earnings for Manufactured Homes and Construction Products are reflected in this summary net of their respective
minority interests. Operating earnings related to those minority interests were $2,492 and $2,678 for Manufactured Homes in
1999 and 1998, respectively. Minority interest for Construction Products WaS $51,121, $40,587, $:31,690, $26,676 and
$17,252 for 1999,1998,1997,1996 and 1995, respectively.
@
.
.
.
.
.
Centex corporation and Subsidiaries
STATEMENTS OF CONSOLXDATED EARNXNGS
(Dollars in thousands, except per share data)
REVENUES
Home Building
conventional Homes
Manufactured Homes
Investment Real Estate
Financial Services
Construction Products
contracting and construction services
COSTS RND EXPENSES
Home Building
conventional Homes
Manufactured Homes
Investment Real Estate
Financial Services
construction Products
Contracting ond construction services
other, net
Corporate General and Administrative
Interest
Minority Interest
EARNXNGS BEFORE INCOME TAXES
Income Taxes
NET EARNXNGS
EARNXNGS PER SHARE
Basic
Diluted
RVERAGE SHARES OUTSTAHDXHG
Basic
Common Share Equivalents
Options
convertible Debenture
Diluted
See notes to consolidated financial statements.
.
@
For the Years Ended March '31,
1999
1998
1997
$2,819,442 $2,312,045 $2,299,592
178,556 140,621
33,694 I 25,403 9,032
436,299 246,278 168,722
336,073 297,322 239,380
1,350,776 953,781 1,068,265
5,154,840 3,975,450 3,784,991
2,577,219 2,141,514 2,155,549
165,811 129,202
4,274 (2,828) (8,864)
343,990 214,907 144,312
215,763 208,985' 174,974
1,335,567 946,629 1,070,448
15,624 7,439 2,260
28 , 104 21,261 16,817
41,581 33,256 34,062
53,613 43,447 31,690
4,781,546 3,743,816 3,621,248
373,294 231,63,4 163,743
141,332 86,828 57,180
$ 231,962 $ 144,806 $ 106,563
$ 3.90 $ 2,45 $ 1.86
$ 3.75 $ 2.36 $ 1.80
59,488,701
59,007,158
57,280,710
1,965,116
400,000
1,857,785
400,000
1,578,192
400,000
59,258,902
61,853,817
61,264,~43
-
--
Centex Corporation and Subsidiaries
CONSOUDATED BALANCE SHEETS
(Dollars in thousands)
ASSETS
Cash and Cash Equivalents
Receivables -
Residential Mortgage Loans
Construction Contracts
Trade, including Notes of $29,456 and $12,904
Inventories _
Housing Projects
Land Held for Development and Sale
Construction Products
Other
Investments _
Centex Development Company, L.P.
Joint Ventures and other
Unconsolidated subsidiaries
Property and Equipment, net
other Assets _
Deferred Income Taxes
Goodwill, net
Mortgage Securitization Residual Interest
Deferred Charges and Other
LXABXLXTXES AND STOCKHOLDERS' EQUXTY
Accounts Payable and Accrued Liabilities
Short-term Debt
Long-term Debt
payables to Affiliates
Minority stockholders' Interest
Negative Goodwill
Stockholders' Equity _
Preferred Stock, Authorized 5,000,000 Shares, None Issued
Common stock, $.25 Par Value; Authorized 100,000,000 Shares;
Issued and Outstanding 59,366,350 and 59,531,756 Shares
Capital in Excess of Par Value
Retained Earnings
Total stockholders' Equity
See notes to consolidated financial statements.
.
Centex Corporation and Subsidiaries
March 31,
1999 1998
$ 111,268 $ 96,316
1,395,616 1,191,450
232,779 207,666
226,999 163,203
1,412,788 970,290
74,081 46,644
33,030 32,537
13,920 12,663
63,207 34,526
48,594 7,556
313,655 295,992
49,107 147,607
222,162 133,647
80,152 14,747 .
57,388 36,731
$4,334,746 $3,416,219
$1,018,650 $ 799,154
1,626,600 1,152,873
284,299 237,715
140,721 152,466
66,837 62,637
14,847
20,822
1,161,970
1,197,639
$4,334,746
14,663
36,761
939,526
991,172
$3,416,219
.
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l"IlI!!IIlI'-"""","""
Centex Corporation and subsidiaries
. CONSOUDATED BALANCE SHEETS --=---=-~
(continued)
Centex corporation Financial Services
March 31, March 31 I
1999 1998 1999 1998
$ 72,279 $ 87,491 $ 38,989 $ 10,825
1,395,616 1,191,450
232,779 207,688
171,264 129,870 55,735 53,333
1,412,788 970,290
74,081 48,844
33,030 32,537
13,920 12,883
63,207 34,526
48,594 7,558
221,744 146,592
285,891 276,008 27,764 19,984
40,541 144,090 8,566 3,517
206,595 123,709 15,567 10,138
. 80,152 14,747
40,962 23,730 16,426 13,001
$2,917,675 $2,245,816 $1,638,815 $1,316,995
$ 926,377 $ 711,564 $ 92,273 $ 87,590
303,656 73,823 1,322,944 1,079,050
284,299 237,715
102,652 58,299
138,867 148,705 1,854 3,763
66,837 82,837
14,847 14,883 1 1
20,822 36,761 75,944 74,944
1,161,970 939,528 43,147 13,348
1,197,639 991,172 119,092 88,293
$2,917,675 $2,245,816 $1,638,815 $1,316,995
In the supplemental data presented above, nCentex corporation" represents the
adding together of all subsidiaries ather than thase included in Financial Services as
described in Note A to the consolidated financial statements. Transactions between
Centex corporation and Financial Services have been eliminated from the Centex
corporation and subsidiaries balance sheets.
.
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Centex Corporation and subsidiaries
STATEMENTS OF CONSOLIDATED CASH FLOWS .
(Dol/ors in thousands)
For the Years Ended March 31,
1999 1996 1997
CASH FLOWS - OPERATING ACTIVITIES
Net Earnings $ 231,962 $ 144,806 $ 106,563
Adjustments -
Depreciation, Depletion and Amortization 36,172 25,638 13,512
Deferred Income Taxes 96,462 59,181 42,843
Equity in Earnings of Centex Development
Company, L.P. and Joint Ventures (125) (3,796) (996)
Minority Interest, net of taxes 35,112 28,836 20,567
Increase in Receivables (66,897) (36 , 1 63) (22,834)
Increase in Residential Mortgage loans (204,166) (558,793) (2,901)
(Increase) Decrease in Inventories (426,301) (70,337) 99,260
Increase in payables and Accruals 205,671 61,456 12,833
Increase in other Assets, net (115,179) (72,445) (40,988)
other, net (46,859) (18,598) 29,649
(254,148) (440,215) 257,508
CASH FLOWS - INVESTING ACTIVITIES
(Increase) Decrease in Advances to Centex
Development Company, L.P. and Joint Ventures (51,147) 7,195 4,725
Acquisitions - .
Home Building Operations (124,116)
Cavco and Eagle Gypsum (104,894)
Property and Equipment Additions, net (52,453) (36,874) (16,137)
--
(227,716) (29,679) (116,306)
--
CASH FLOWS - FINANCING ACTIVITIES
Increase (Decrease) in Debt -
Secured by Residential Mortgage loans 243,894 498,532 5,502
Other 276,417 27,769 (135,804)
Proceeds from Stock Option Exercises 9,482 18,583 12,122
Retirement of Common stock (25,457)
Dividends Paid (9,520) (7,994) (S,744)
494,816 536,890 (123,924)
NET INCREASE IN CASH 12,952 66,996 17,278
CASH AT BEGINNING OF YEAR 98,316 31,320 14,042
CASH AT END OF YEAR $ 111,268 $ 98,316 $ 31,320
.
See notes to consolidated financial statements.
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Centex Corporation and subsidiaries
Ie STATEMENTS OF CONSOLIDATED STOCKHOLDERS' EQUITY
(Doliars in thousands)
capital In
Preferred Common Excess Of Retained
stock stock Par Value Earnings Total
Balance, March 31, 1996 $ - $14,214 $ 6,725 $ 701,897 $ 722,836
Exercise of stock options 294 11,828 12,122
Net Earnings 106,563 106,563
Cash Dividends (5,744) (5,7 44)
Balance, March 31, 1997 14,508 18,553 802,716 835,777
Exercise of stock options 375 18,208 18,583
Net Earnings 144,806 144,806
Cash Dividends (7,994) (7,994)
Balance, March 31, 1998 14,883 36,761 939,528 991,172
Exercise of stock options 143 9,339 9,482
Retirement of 714,800 Shores (179) (25,278) (25,457)
Net Earnings 231,962 231,962
Cosh Dividends (9,520) (9,520)
Balance, March 31, 1999 $ - $14,847 $ 20,822 $1,161,970 $1,197,639
-
. See notes to consolidated finoncioI statements.
.
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Centex Corporation and subsidiaries
NOTES TO CONSOLIDATED FXNANCXAL STATEMENTS
(Dollars in thousands, except per shore data)
(A) SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Centex Corporation and subsidiaries ("Centex"
or the "Company") after the elimination of all significant intercompany balances and transactions.
Balance sheet data are presented in the following categories:
· Centex Corporation and Subsidiaries. This represents the adding together of Centex Corporation,
Financial Services and all of their consolidated subsidiaries. The effects of transactions among related
companies within the consolidated group have been eliminated.
· Centex Corporation. This information is presented as supplemental information and represents the
adding together of all subsidiaries other than those included in Financial Services, which are presented
on an equity basis of accounting.
· Financial Services. This information is presented as supplemental information and represents Centex
Financial Services and subsidiaries.
The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
REVENUE RECOGNITION
Revenues from Home Building projects and Investment Real Estate are recognized as homes and properties
are sold and title passes. Earnings from the sale of mortgage servicing rights and from loan origination fees
are recognized when the related loan is sold and delivered to a third-party purchaser.
Long-term construction contract revenues are recognized on the percentage-of-completion method based on
the costs incurred relative to total estimated costs. Full provision is made for any anticipated losses. Billings
for long-term construction contracts are rendered monthly, including the amount of retainage withheld by
the customer until contract completion. As a general contractor, the Company withholds similar retainages from
each subcontractor. Retainages of $79 million included in construction contracts receivable and $82 million
included in accounts payable at March 31, 1999 are generally receivable and payable within one year.
Claims are recognized as revenue only after management has determined that collection is probable and the
amount can be reliably estimated. Claims of $2.1 million, $0.5 million and $6.9 million are included in revenues
for the years ended March 31, 1999, 1998 and 1997, respectively.
Notes receivable at March 31, 1999 are collectible primarily over five years with $15.7 million being due within
one year. The weighted average interest rate at March 31, 1999 was 6.1 %.
INVENTORY, CAPITALIZATION AND SEGMENT EXPENSES
Housing projects and land held for development and sale are stated at the lower of cost (including direct
construction costs and capitalized interest and real estate taxes) or fair value less cost to sell. The capital-
ized costs, other than interest, are included in Home Building and Investment Real Estate costs and expenses
in the statement of consolidated earnings as related revenues are recognized. Interest costs relieved from
inventories are included as interest expense. The Company reviews the recoverability of its Home Building
inventories on an individual project basis in accordance with the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of."
Construction Products inventories are stated at the lower of average cost (including applicable material, labor
and plant overhead) or market.
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.
'.
.
Centex Corporation and subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
General operating expenses associated with each segment of business are expensed as incurred and are
included in the appropriate segment of business.
INVESTMENTS
From time to time the Company sells certain real estate assets to Centex Development Company, L.P. in exchange
for cash or additional Class C Partnership units. The assets are sold at their estimated fair m'Jrket value at the
time of sale using available market information including data from recent sales, brokers and appraisals. The
Company records any excess of the sales price over book value as deferred income. The CompclnY recognizes the
deferred income when the properties are subsequently sold by Centex Development Company, L.P. See Note F for
additional information regarding Centex Development Company, L.P.
The Company is involved in joint ventures with interests ranging from 20% to 50%. The investments in these
joint ventures are carried on the equity method in the consolidated financial statements e~cept for Centex
Construction Products, Inc. 's ("Construction Products") 50% joint venture interests in its cement plants in
Illinois and Texas. Construction Products has proportionately consolidated its pro rata interest in the revenues,
expenses, assets and liabilities of those ventures. The earnings or losses of the Company',; other joint ven-
tures are not significant and are included in the appropriate segment of business revenues.
PROPERTY AND EqUIPMENT
Property and equipment are stated at cost. Major renewals and improvements are capitalized and depreciated.
Repairs and maintenance are expensed as incurred. Depreciation is provided on a straight-line basis over the
estimated useful lives of depreciable assets. Costs and accumulated depreciation applicab,le to assets retired
or sold are eliminated from the accounts and any resulting gains or losses are recognized at such time.
GOODWILL AND NEGATIVE GOODWILL
Goodwill represents the excess of purchase price over net assets of businesses acquired. Goodwill is amortized
over various periods between 6 and 40 years. The Company monitors its goodwill and other intangibles to deter-
mine whether any impairment of these assets has occurred. In making such determination, the Company evaluates
the performance, on an undiscounted basis, of the underlying businesses which gave rise to such amount. In
case of an impairment, the recorded costs would be written down to fair value on a discounted basis. Goodwill
amortization totaled $10.5 million in fiscal 1999, $5.8 million in fiscal 1998 and $2.1 million in fiscal 1997.
Negative goodwill arose in conjunction with Centex's Home Building subsidiary's fiscal 1997 combination
transaction with vista Properties, Inc. Negative goodwill is being amortized over approximotely seven years
($16 million annually) which represents the estimated period over which Vista's land will be developed and/or
sold. Amortization is reflected as a reduction of costs and expenses in the accompanying statements of
consolidated earnings.
EARNINGS PER SHARE
Basic earnings per share is computed based on the weighted average number of shares of common stock out-
standing. Diluted earnings per share is computed bosed upon the basic weighted average rumber of shares
plus the dilution of the stock options and the convertible debenture.
options to purchase approximately one million shares of common stock at approximately $33.60 per share
(expiring in April 2008) were outstanding during the fiscal year ended March 31, 1999 but were not included in
the computation of diluted earnings per share because they were anti-dilutive.
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Centex Corporation and subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
RESIDENTIAL MORTGAGE LOANS RECEIVABLE
Residential mortgage loans of $1.4 billion at March 31, 1999 are stated at the lower of cost or market. Market is
determined based on forward sale commitments or on current investor yield requirements, adjusted for deferred
hedging gains or losses. Substantially all of the mortgage loans generated by CTX Mortgage are sold forward upon
closing and subsequently delivered to third-party purchasers within approximately 60 days thereafter, while substan-
tially all the mortgage loans produced by Centex Home Equity Corporation ("Home Equity") are securitized, generally
on a quarterly basis. Due to the fact that defaults of new loans within the first 60 to 90 days are minimal, no signifi-
cant reserves have been provided.
MORTGAGE SECURITIZATION RESIDUAL INTEREST
One of Home Equity's primary sources of income is the recognition of gains in connection with securitizations
and, to a lesser extent, whole loan sales. In a securitization, Home Equity retains a residual interest that
represents its right to receive, over the life of the securitization, the excess of the weighted average coupon
on the loans securitized over the interest rates on the securities sold, a normal servicing fee, a trustee fee,
an insurance fee (where applicable) together with the credit losses relating to the loans securitized (the
"Excess Spread"). In a whole loan sale, Home Equity receives cash and recognizes a gain upon completion of
the transaction. Gain on sale of mortgages also includes points and fees generated through direct retail mort-
gage originations (included in earnings when the loans are securitized or sold).
In accordance with Statement of Financial Accounting standards No. 115, "Accounting for certain Investments
in Debt and Equity Securities," the Company classifies Mortgage Securitization Residual Interest ("MSRI") as
trading securities. As such they are carried at fair value on the Company's balance sheet. Unrealized changes
in MSRI fair value are included in the Company's statement of operations in gain on sale of mortgage loans in
the period of the change.
Home Equity estimates the fair value of MSRI through the application of discounted cash flow analysis, which
requires the use of various assumptions, the most significant of which are anticipated prepayments (principal
reductions, in excess of contractually scheduled reductions), estimated future credit losses, and the discount
rate. Home Equity continuously monitors the fair value of MSRI and reviews the factors expected to influence
discount rates, future annualized Conditional (or Constant) Prepayment Rate ("CPR") and credit losses. If
changes in assumptions are necessary, MSRI fair value is adjusted accordingly.
At March 31, 1999, Home Equity's MSRI portfolio was comprised of residual interests in securitizations with a
fair value of $80.2 million. Home Equity valued its MSRI using a discount rate of 12% simple interest, a loss
rate of 0.5% per annum and CPRs that differ for fixed rate and variable rate loans. For fixed rate loans, the
CPR is 4.8% per annum in the first month of the loan and increases approximately 2.1% per annum each month
reaching a maximum rate of 28% per annum by the end of the twelfth month. The variable rate loans have a
constant CPR of 32% per annum. The average age of Home Equity's MSRI portfolio is approximately six months;
because the pools are unseasoned, actual experience to date would not be meaningful. However, nothing has
occurred that gives management reason to believe that actual experience will differ significantly from the
above assumptions.
OFF-BALANCE-SHEET RISK
CTX Mortgage enters into various financial agreements, in the normal course of business, in order to manage
the exposure to changing interest rates as a result of having issued loan commitments to its customers at
a specified price and period, and commits to sell mortgage loans at a specified price to various investors. CTX
Mortgage had commitments to mortgagors of approximately $384 million and commitments from investors
against these loan commitments of approximately $357 million at March 31, 1999.
The Company does not engage in the trading of securities or other financial instruments.
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.
Centex corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
\ (continued)
STATEMENTS OF CONSOLIDATED CASH FLOWS - SUPPLEMENTAL DISCLOSURES
Interest expenses relating ta the Financial services operotions are included in their respective costs and
expenses. Interest related to non-financial services operations are included as interest exp,ense as
summarized below:
For the Years Ended March 3:1,
1999
1998
1997
Total Interest Incurred
Less - Financial services
$118,451
(76,870)
$ 41,581
$ 78, 1~!8
(44,872)
$ 33,2'36
$ 65,517
(31,455)
$ 34,062
Interest Expense
Net payments made for federal, state and foreign income taxes during the fiscal years ended March 31, 1999,
1998, and 1997 were $43.7 million, $23.3 million, and $16.0 million, respectively.
STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS
statement of Financial Accounting standards No. 125, "Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities," issued in June 1996, superseded SFAS No. 122 in establishing
standards for resolving issues relating to the accounting for continuing involvement arisi',)g from the transfer
of financial assets. Under SFAS No. 125, an entity that undertakes an obligation to servi<;e financial assets
recagnizes a financial asset or servicing liability far that servicing contract and amortizes the estimated
net servicing income or loss over the projected contract period. The servicing asset or liability is periodically
reviewed for impairment or increased obligation based on its fair value. This statement was effective for
transfers and servicing of financial assets occurring after December 31, 1996. Implemenicing this new state-
ment did not have a material effect on the Company's financial position or results of operations.
Effective April 1998, the Company adopted statement of Financial Accounting standards No. 130, "Reporting
Comprehensive Income." SFAS No. 130 establishes standards for reporting and displayin9 comprehensive
income and its components. The Company has no nonowner changes in equity that would be classified as
"other comprehensive income." As a result, comprehensive income is equal to the Compcmy's net earnings.
statement of Financial Accounting standards No. 131, "Disclosures about segments of on Enterprise and
Related Information," issued in June 1997, changes the way public companies report information about
segments. SF AS No. 131, which is based on the management approach to segment reporting, requires com-
panies to report selected quarterly segment information and entity-wide disclosures about products and
services, major customers, and the material countries in which the entity holds assets cmd reports revenues.
Effective April 1998, the Company adopted this statement. It did not have a material effect on the
Company's financial statements.
In February 1998, statement of Financial Accounting standards No. 132, "Employers' Disclosures about
Pensions and other postretirement Benefits," was issued. SFAS No. 132 requires additional disclosures relating
to defined benefit pension or postretirement plans. This statement is effective for fiscal years beginning
after December 15,1997. The implementation of this statement had no material effect on the Company.
.
statement of Financial Accounting standards No. 133, "Accounting for Derivative Insb'uments and Hedging
Activities," was issued in June 1998. This statement addresses the accounting for derivative instruments,
including derivative instruments embedded in other contracts (collectively referred toas derivatives), and
hedging activities as well as the disclosure of these activities. It requires that an entity recognize all deriva-
tives as either assets or liabilities in the consolidated balance sheet and measure those instruments at fair
value. The effective date of the statement will be April 2000 for the company. There IS, however, an exposure
draft dated May 1999 that would delay the implementation of this statement until April 2001.
@
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Centex Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Statement of Financial Accounting Standards No. 134, "Accounting for Mortgage-Backed Securities Retained
after the Securitization of Mortgage Loans Held for Sale by a Mortgage Banking Enterprise," was issued in
October 1998. This statement requires that an entity engaged in mortgage banking classify the resulting
mortgage-backed security or other retained interest based on its ability and intent to sell or hold the invest-
ments. The Company will implement SFAS No. 134 as of June 30, 1999.
RECLASSZFZCATZONS
Certain prior year balances have been reclassified to be consistent with the fiscal 1999 presentation.
(B) PROPERTY AND EQUIPMENT
Property and equipment cost by major category and accumulated depreciation are summarized below:
March 31,
Land, Buildings and Improvements
Machinery, Equipment and Other
Plants
1999
1998
$ 49,440
183,375
322,991
555,806
(242,151)
$ 313,655
$ 43,291
174,403
299,895
517,589
(221,597)
$ 295,992
Accumulated Depreciation
(C) INDEBTEDNESS
SHORT-TERM DEBT
Balances of short-term debt were:
March 31.,
1999
Banks
Commercial Paper
Other Financial Institutions
Centex
Corporation
1998
Financial
Services
Centex
Corporation
Financial
Services
$
$ 596,094
$
$ 406,546
289,140
14,516
$303,656
65,000
8,823
$73,823
726,850
$1,322,944
672,504
$1,079,050
Consolidated Short-term Debt
$1,626,600
$1,152,873
The Company borrows on a short-term basis from banks under uncommitted lines which bear interest at
prevailing market rates. The weighted average interest rates of the short-term indebtedness outstanding
during fiscal 1999 and 1998 were 6.0% and 6.2%, respectively. The weighted average rates of balances
outstanding for March 31, 1999 and 1998 were 5.6% and 6.2%, respectively.
LONG-TERM DEBT
Balances of long-term debt were:
March 31,
Subordinated Debentures, 7.375%, due in 2005
Subordinated Debentures, 8.75% to 8.8%, due in 2007
Other Indebtedness, 6.0% to 9.6%, due through 2027
1999
$ 99,698
99,473
85,128
$284,299
1998
$ 99,650
119,428
18,637
$237,715
Maturities of long-term debt during the next five fiscal years are: 2000, $3,910; 2001, $60,668; 2002, $1,625;
2003, $15,305; 2004, $205.
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Ie
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Centex Corporation and subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-=-~
(Continued)
Included in other long-term debt is a $2.1 million convertible subordinated debenture sold in August 1985 to a
corporate officer at par. The indebtedness bears interest at LIBOR plus 1.5% and is convertible into 400,000
shares of the company's common stock. In connection with this transaction, the Company ha~; guaranteed the
payment of a $2.1 million note payable to a bank by the officer. During May 1999, the terms of the debenture
were amended to extend its maturity date from March 2000 to March 2010.
CREDIT FACILITIES
The Company maintains a $425 million revolving credit agreement expiring in August 2001. Under the terms of
the agreement, $170 million may be borrowed directly by CTX Mortgage. There were no borrowings outstanding
to Centex Corporation under this facility during the fiscal years ended March 31, 1999 and H'98. CTX Mortgage
has borrowed under this facility during fiscol years ended March 31, 1999 and 1998. Centex also has a $235
million revolving credit agreement with a group of banks that expires on November 17, 1999, which was put in
place during fiscal 1999. There have been no borrowings under this facility since its inception.
CTX Mortgage has a $300 million committed and secured mortgage warehouse facility with a bonk group,
expiring in october 1999. CTX Mortgage also maintains two committed mortgage warehouse facilities of $600
million expiring $300 million in August 1999 with an investment bank and expiring $300 million in october 1999
with a commercial bank. In addition, CTX Mortgage has a $200 million asset-backed commercicl paper program
which was extended for one year (to April 2000) and increased to $300 million in April 1999. CTX Mortgage's
warehouse facilities require limited support from Centex which, under certain conditions, may require Centex's
purchase from time to time of up to 10% of the outstanding collateral.
At March 31, 1999, Centex Home Equity had a $300 million committed and secured mortgage warehouse facility
with a bank group. The line was renewed and extended in April 1999 for $250 million, expirin9 in october 1999.
Under the most restrictive covenants of the various debt agreements, retained earnings of $689 million were
free of restrictions at March 31,1999.
(D) CRPITRL STOCK
STOCKHOLDER RIGHTS PLAN
On October 2, 1996, the Board of Directors of the Company adopted a new stockholder rights plan ("plan")
to replace the original rights plan which expired on october 1, 1996. In connection with the Plan, the Board
authorized and declared a dividend of one right ("Right") for each share of Common stock, par value $.25 per
share, of the Company ("Common stock") to all stockholders of record at the close of business on October 15,
1996. After giving effect to the Company's two-for-one stock split effective March 2, 1998, each Right
entitles its holder to purchase one two-hundredths of a share of a new series of preferred stock designated
Junior Participating Preferred stock, series D, at an exercise price of $67.50. The Rights will become exercis-
able upon the earlier of 10 days after the first public announcement that a person or group has acquired
beneficial ownership of 15 percent or more of the Common stock, or 10 business days after 0 person or group
announces an offer, the consummation of which would result in such person or group beneficially owning 15
percent or more of the Common stock (even if no purchases actually occur), unless such time periods are
deferred by appropriate Board action. The Plan excludes FMR Corp. from causing the rights to become exercis-
able until such time as FMR Corp., together with certain affiliated and associated persons, collectively own 20
percent or more of the Common stock. If the Company is involved in a merger or other business combination at
any time after a person or group has acquired beneficial ownership of 15 percent or more (or, in the case of
FMR Corp., 20 percent or more) of Common stock, the Rights will entitle a holder to buy a number of shares of
common stock of the acquiring Company having a market value of twice the exercise price of each Right. If any
person or group acquires beneficial ownership of 15 percent or more (or, in the case of FMR Corp., 20 percent
or more) of Common stock, the Rights will entitle a holder (other than such person or any member of such group)
to buy a number of additional shares of Common stock having a market value of twice the exercise price of
each Right. Alternatively, if a person or group has acquired 15 percent or more (or, in the ca~;e of FMR corp.,
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Centex Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
.
I (Continued)
20 percent or more) of the Common stock, but less than 50 percent of the Common stock, the Company may at
its option exchange each Right of a holder (other than such person or any member of such group) for one
share of Common stock. In general, the rights are redeemable at $0.01 per right until 15 days after the Rights
become exercisable as described above. Unless earlier redeemed, the Rights will expire on October 12, 2006.
STOCK OPTIONS
The Company has three stock option plans: the Amended and Restated 1998 Centex Corporation Employee Non-
Qualified stock Option plan (the "1998 Plan"), the Centex Corporation Amended and Restated 1987 stock
Option plan (the "1987 Plan"), and the Centex Corporation stock Option plan (the "centex Plan"). Options
granted under the 1998 plan may not be granted at less than fair market value at the date of grant. Although
the 1987 Plan provides that option grants may be at less than the fair market value at the date of the grant,
the Company has consistently followed the practice of issuing options at the fair market value at the date of
grant. Options granted under the Centex Plan were not granted at less than the fair market value at the date
of the grant. The Centex plan expired during the fiscal year ended March 31, 1999. Under all three plans,
option periods and exercise dates may vary within a maximum period of ten years.
The Company records proceeds from the exercise of options as additions to common stock and capital in excess
of par value. The federal tax benefit, if any, is considered additional capital in excess of par value. No
charges or credits would be made to earnings unless options were to be granted at less than fair market value
at the date of the grant.
A summary of the activity of the three stock option plans is presented below:
Options Outstanding,
Beginning of Year
Options Granted
Options Exercised
Options Forfeited/Expired
Options Outstanding,
End of Year
1999 1998 1997 .
Weighted- Weighted- Weighted-
Average F1verage Average
Number Exercise Number Exercise Number Exercise
of Shores Price of Shares Price of Shares Price
5,260,056 $14.22 5,360,058 $10.89 6,051,818 $ 9.47
2,254,800 $38.27 1,804,890 $18.36 715,750 $16.01
(709,283) $11.51 (1,660,518) $ 7.80 (1,190,630) $ 6.47
(41,825) $18.44 (244,374) $15.18 (216,880) $12.61
6,763,748 $22.46 5,260,056 $14.22 5,360,058 $10.89
2,760,743 2,045,732 2,045,684
Options Exercisable,
End of Year
shares Available for Future
stock Option Grants,
End of Year
3,478,257
4,104,254
4,827,608
Weighted-Average
Fair Value of Options
Granted during the Year
$18.54
$9.31
$7.09
Using the treasury stock method, which assumes that any proceeds together with the related tax benefits
from the exercise of options would be used to purchase common stock at current prices, the dilutive effect of
the options on outstanding shares as of March 31, 1999 would have been 2.3%. This is significantly less than
appears on a gross basis when compared to the 59,388,350 common shares outstanding as of March 31, 1999.
.
@
.
Centex corporation and subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
I (Continued)
The following table summarizes informotion about stock options outstanding at March 31, 1999:
options outstanding
Weighted-
Average Weighted-
Number of Remaining Rverage
shoJ'es Contractual Exercise
Range of Exercise Prices outstanding Life (Years) Price
$ 8.5625 - $12.6250 1,388,248 1.96 $ 9.13
$13.0000 - $19.5000 2,991,550 6.96 $16.66
$19.5938 - $28.5313 93,000 8.24 $23.25
$30.3438 - $39.6875 2,290,950 9.04 $38.08
6,763,748 6.66 $22.46
Options Exercisable
Weighted-
Number of Average
Shares Exercise
outstanding Price
1,235,566 $ 8.97
1,126,732 $16.51
8,000 $21.36
390,445 $38.52
2,760,743 $16.26
The Company has adopted the disclosure-only provisions of SFAS No. 123, "Accounting for stock-Based
Compensation." Accordingly, no compensotion cost has been recognized for the stock option plans. Had com-
pensation cost for the company's three stock option plans been determined based on the fair value at the
grant date for awards in 1999, 1998 and 1997 consistent with the provisions of SFAS No. 123, the company's
net earnings and earnings per share would have been reduced to the pro forma amounts indicated below:
1999 1998 1997
Net Earnings - as Reported $231,962 $144,B06 $106,563
. Net Earnings - Pro Forma $217,504 $140,034 $105,063
Earnings Per Share - as Reported
Basic $ 3.90 $ 2.45 $ 1. 86
Diluted $ 3.75 $ 2.36 $ 1.80
Earnings Per share - Pro Forma
Basic $ 3.66 $ 2.37 $ 1. 83
Diluted $ 3.52 $ 2.29 $ 1.77
The fair value of each option grant was estimated on the date of grant using the Black-scholes option-pricing
model with the following weighted-average assumptions:
1999 1998 1997
Expected Volatility 34.3% 35.3% 35.7%
Risk-Free Interest Rate 5.70/0 6.9% 6.8%
Dividend Yield .40/0 .6% .6%
Expected Life (Years) 8 8 8
.
@
Centex Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(E) INCOME TAXES
The provision for income taxes includes the following components:
For the Years Ended March 31,
1999 1998 1997
Current Provision
Federal $ 32,858 $18,555 $11,216
state 12,012 9,092 3,121
44,870 27,647 14,337
Deferred Provision
Federal 92,008 57,780 38,771
state 4,454 1,401 4,072
96,462 59,181 42,843
Provision for Income Taxes $141,332 $86,828 $57,180
The effective tax rate is greater than the federal statutory rate of 35% in 1999 and 1998 due to the
following items:
.
.
For the Years Ended March 31,
1999 1998 1997
Financial Income Before Taxes $373,294 $231,634 $163,743 .
Income Taxes at statutory Rate $130,653 $ 81,072 $ 57,311
Increases (Decreases) in Tax Resulting From -
state Income Taxes, net 9,068 5,822 4,131
Negative Goodwill Amortization (6,000) (6,000) (6,000)
Other 7,611 5,934 1,738
Provision for Income Taxes $141,332 $ 86,828 $ 57,180
Effective Tax Rate 380/0 37% 35%
The deferred income tax provision results from the following temporary differences in the recognition of
revenues and expenses for tax and financial reporting purposes:
Utilization of Net Operating Loss Carryforwards
Tax Basis in Excess of Book Basis
Uniform Capitalization for Tax Reporting
Excess Tax Depreciation and Amortization
Financial Accrual Changes and Other
For the Years Ended March 31,
1999 1998 1997
$28,224 $43,771 $46,865
71,740 9,207 3,648
3,525 7,379 (2,893)
2,366 4,097 2,257
(9,393) (5,273) (7,034)
$96,462 $59,181 $42,843
@
.
.
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Centex corporation and subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Components of deferred income taxes are as follows:
Deferred Tax Liabilities
Excess Tax Depreciation and Amortization
Interest and Real Estate Taxes Expensed as Incurred
E qui ty A dj u s t men t s
Consolidated Return Regulation Deferrals
All other
March 3'1,
1999 1998
$ 31,347 $ 30,517
18,933 20,828
27,675 24,714
6,861 6,864
13,934 14,413
98,750 97,336
26,548 99,281
17,631 43,536
30,924 34,493
60,301 50,084
4,555
7,898 17,549
147,857 244,943
$ 49,107 $147,607
Total Deferred Tax Liabilities
Deferred Tax Assets
Tax Basis in Excess of Book Basis
Net Operating Loss Carryforwards
Uniform capitalization for Tax Reporting
Financial Accruals
Alternative Minimum Tax
All other
Total Deferred Tax Assets
Net Deferred Tax Assets
At March 31,1999, Centex had $50.3 million of net operating loss carryforwards available to reduce future
federal taxable income which expire if unused as follows: 2006, $1.5 million; 2007, $3.0 million; 2008, $1.0
million; 2009, $0.5 million; 2010, $28.6 million; and 2011, $15.7 million.
(F) CENTEX DEVELOPMENT COMPRNY, L.P.
In March 1987, certain of Centex's subsidiaries contributed to Centex Development Company, L.P., (the
"Partnership") a newly formed master limited partnership, properties with a historical cost basis (which
approximated market value) of approximately $76 million. The Partnership was formed to enable stockholders
to participate in long-term real estate development projects whose dynamics are inconsistent with Centex's
traditional financial objectives.
The Partnership is a limited partnership which is controlled by its general partner, 3333 Development
Corporation ("Development"), a wholly-owned subsidiary of 3333 Holding Corporation ("Holding"). Holding is a
separate public company whose stock trades in tandem with Centex's stock. The common stock of Holding was
distributed in 1987 (with warrants to purchase approximately 80% of the Class B limited partnership units in
the Partnership) as a dividend to the stockholders of Centex and is held by a nominee. These securities, held
by the nominee on behalf of the stockholders, will trade in tandem with the common stock of Centex until
such time as they are detoched. The securities may be detached at any time by Centex's Board of Directors but
the warrants to purchase Class B units automatically become detached in November 2007.
The three-person Board of Directors of Holding is elected by the stockholders of Centex. Two of the Board
members, representing the majority of the Board, are independent outside directors who are also not direc-
tors of Centex. Thus the general partner of the Partnership is controlled by the stockholders of Centex. The
general partner and independent board of Holding manage how the Partnership conducts its activities includ-
ing the sales, development, maintenance and zoning of properties. The general partner may sellar acquire
properties, including the contributed property, and enter into other business transactions without the con-
sent of the limited partners. In addition, the limited partners cannot remove the general partner.
@
Centex Corporation and subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
The Company accounts for its limited partner investment in the Partnership on the equity method of account-
ing because the Company's interest in the cash and earnings of the Partnership is limited to defined amounts,
and the Company does not control the Partnership.
During fiscal year 1998, the agreement governing the Partnership was amended to allow for the issuance of a
new class of limited partnership units, Class C limited Partnership Units ("Class C Units"). On March 31, 1998,
7,542 Class C Units were issued in exchange for assets with a fair market value of $7.5 million. Additionally,
on this date, the 1,000 Class A Units were converted to 32,260 new Class A units. During fiscal 1999, an addi-
tional19,445 Class C Units were issued in exchange for assets with a fair market value of $19.4 million. These
assets were recorded by the Partnership at fair market value. The partnership agreement provides that
Centex, the Class A and Class C limited partner, is entitled to a cumulative preferred return of 9% per annum
on the average outstanding balance of its Unrecovered capital, defined as its capital contributions, adjusted
for cash distributions representing return of the capital contributions. In July 1995, in conjunction with the
extension of the automatic detachment date from 1997 to 2007, Centex reduced its Unrecovered capital, as
defined, to $47.3 million and waived unpaid preference as of that date of $37.5 million. Unrecovered capital,
as defined, was reduced by $4.5 million during fiscal 1998 and $4.5 million during fiscal 1997 as a result of
capital distributions and preference payments. Preference payments in arrears at March 31, 1999 amounted to
$9.1 million. No preference payments were made during fiscal 1999.
supplementary condensed combined financial statements for the Company, 3333 Holding Corporation and
subsidiary and Centex Development Company, loP. and subsidiaries are set forth below. For additional informa-
tion on 3333 Holding Corporation and its subsidiary and Centex Development Company, loP. and subsidiaries,
see their separate financial statements and related footnotes included elsewhere in this Report.
SUPPLEMENTARY CONDENSED COMBINED BALANCE SHEETS
ASSETS
Cash and Cash Equivalents
Receivables
Inventories
Investments in Joint Ventures and other
Property and Equipment, net
Other Assets
March :'H,
1999 1998
$ 111,632 $ 98,576
1,860,090 1,588,247
1,639,664 1,107,941
49,266 10,598
313,886 296,080
410,321 333,044
$4,384,859 $3,434,486
$1,026,867 $ 802,547
1,668,496 1,166,694
284,299 237,715
140,721 152,468
66,837 82,837
1,197,639 992,225
$4,384,859 $3,434,486
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable and Accrued liabilities
short-term Debt
long-term Debt
Minority stockholders' Interest
Negative Goodwill
stockholders' Equity
@
.
.
.
.
.
.
Centex Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
SUPPLEMENTARY CONDENSED COMBINED STATEMENTS OF EARNINCS
For the Years Ended March 3i,
1999 1993 1997
$5,179,188 $3,991,954 $3,793,621
4,805,894 3,760,445 3,629,672
--
373,294 231,509 163,949
141,332 86,828 57,180
--
$ 231,962 $ 144,681 $ 106,769
--
--
Revenues
Costs and Expenses
Earnings Before Income Taxes
Income Taxes
Net Earnings
(G) ACQUISITION OF VISTA PROPERTIES, INC.
In fiscal 1996, the Company acquired certain equity interests in Vista Properties, Inc. for a net investment of
approximately $85 million in cash. At the time of the acquisition, vista owned a real estClte portfolio of prop-
erties located in seven states in which the Company has major operations. Vista's real pr'operty portfolio gen-
erally consisted of land zoned, planned or developed for single- and multi-family residential, office, retail,
industrial, and other commercial uses. During fiscal 1997 , Centex's Home Building subsidiary completed a busi-
ness combination transaction and reorganization with vista whereby Centex's Home Building assets and opera-
tions were contributed to vista and vista changed its name to Centex Real Estate Corpor'ation. As a result of
the combination, Centex's Investment Real Estate portfolio, valued in excess of $125 million, was reduced to
a nominal "book basis" after recording certain deferred tax benefits. Accordingly, as these properties are
developed or sold the net sales proceeds are reflected as operating margin. Negative Goodwill recorded as a
result of the business combination is being amortized to earnings over approximately seven years which repre-
sents the estimated period over which the land will be developed and/or sold. All investment property opera-
tions are being reported through the "Investment Real Estate" business segment.
(H) ACQUISITION OF CAVCO INDUSTRIES, INC.
During March 1997, Centex Real Estate Corporation acquired approximately 80% of Cavcc> Industries, the
largest producer of manufactured homes in Arizona and New Mexico as well as the nation's largest producer of
park model homes, for $74.3 million. Cavco currently operates three manufactured housing facilities in the
phoenix area, a plant near Albuquerque, New Mexico, and a plant in central Texas (opened in fiscal 1999).
Goodwill of approximately $76 million was recorded in connection with the Cavco acquisition (approximately
$61 million relates to the 80% acquired by Centex) and is being amortized over 30 years.
(I) BUSINESS SEGMENTS
The Company operates in five principal business segments: Home Building, Investment Real Estate, Financial
Services, Construction Products and contracting and Construction Services. These segments operate primarily
in the United States and their markets are nationwide. Revenues from anyone customer are not significant
to the Company.
Intersegment revenues and investments in joint ventures are not material and are not shown in the following
tables. The investment in Centex Development Company, L.P. (approximately $63 million) is included in the
Investment Real Estate segment.
@
Centex Corporation and subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
HOME BUILDINC
Conventional Homes
Conventional Homes operations involve the purchase and development of land or lots as well as the construc-
tion and sale af single-family homes. The following table sets forth financial informatian relating to the
Conventional Homes operations.
Revenues
Cast of Sales
Selling, General & Administrative Expenses
operating Earnings
For the Years Ended March 31,
1999 1998 1997
(Dollars in millions)
$2,819.4 $2,312.0 $2,299.6
(2,194.7) (1,839.6) (1,877.3)
(382.5) (301.7) (276.3)
$ 242.2 $ 170.5 $ 144.0
$1,686.9 $1,098.9 $1,036.5
$ 15.5 $ 7.7 $ 4.2
$ 8.5 $ 4.0 $ 3.4
Identifiable Assets
Capital Expenditures
Depreciation and Amortization
Manufactured Homes
Manufactured Homes operations involve the manufacture of quality residential and park model homes and
the sale of these homes through a network of independent dealers. The Company entered the Manufactured
Homes industry in late March 1997, when a subsidiary acquired approximately 60% of Cavco Industries (See
Note H).
The following table sets forth financial information relating to the Manufactured Homes operations.
For the Years Ended March 31,
1999
1998
1997*
(Dollars in millions)
Revenues
Cost of Sales
Selling, General & Administrative Expenses
Operating Earnings
Minority Interest
Net Operating Earnings to Centex
Identifiable Assets
$178.6
(138.3)
(27.5)
12.8
(2.5)
$ 10.3
$140.9
$ 10.5
$ 5.1
$140.6
(113.7)
(15.5)
11.4
(2.7)
$ 8.7
$
$
$116.5
$93.3
capital Expenditures
$ 7.2
$
$
Depreciation and Amortization
$ 3.7
*CAVCO had no effect on Centex's earnings as this acquisition was not effective until/ate March 1997.
.
.
.
8
.
.
.
Centex corporation and subsidiaries
1997
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----~~
I (Continued)
INVESTMENT REAL ESTATE
Investment Real Estate operations involve the development of land relating primarily to multi-.family, industrial,
office, retail and mixed-use projects. The following table sets forth financial information relating to the
Investment Real Estate operations.
For the Years Ended March 31,
1999
1998
(Dollars in millions)
Revenues
Cost of Sales
Selling, General S Administrative Expenses
Negative Goodwill Amortization
operating Earnings
$ 33.7
(14.9)
(5.4)
16.0
$ 29.4
$ 25.4
(6.7')
(6. :i)
16.0
$ 28.~~
Identifiable Assets
$159.8
$ .7
$ .1
$227.'~
$ =
$ . ~
Capital Expenditures
Depreciation and Amortization excluding Negative Goodwill
$ 9.0
(2.6)
(4.5)
16.0
$ 17.9
$269.3
$ .2
$ .1
Property sales related to Investment Real Estate's nominally valued assets (see Note G) resulted in operating
margins of $16.4 million in fiscal 1999, $13.7 million in fiscal 1998 and $4.5 million in fiscal 1997. As of March
31,1999, the Investment Real Estate Group had approximately $75 million nominally valued assets.
FINANCIAL SERVICES
Financial Services operations involve the 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 Centex subsidiaries and by others. The following table
sets forth financial information relating to the Financial Services operations.
For the Years Ended March 31,
1999
1998
(Dollars in mi,'/ions)
Revenues* $ 436.3 $ 246.3
Selling, General S Administrative Expenses (267.1) (170.0)
Interest Expense (76.9) (44.9)
--
operating Earnings $ 92.3 $ 31.4
--
--
Identifiable Assets $1,638.8 $1,317.0
--
--
capital Expenditures $ 17.7 $ 11.2
--
--
Depreciation and Amortization $ 12.9 $ 9'.3
--
--
*Financia/ services revenues include interest income of $97.0 mil/ion, $57.9 million and $42.2 mil/ion in fiscal 1999,
1998 and 1997, respectively. Substantially 01/ of Centex's interest income in each year is earned by the Financial
Services segment.
@
1997
$168.7
(112.8)
(31. 5)
$ 24.4
$704.1
$ 11.1
$ 7.6
Centex Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
I (Continued)
CONSTRUCTXON PRODUCTS
Construction Products operations involve the manufacture and sale of cement, gypsum wallboard and
aggregates and readymix concrete. The following table sets forth financial information relating to the
Construction Products operations.
Revenues
Cost of Sales & Expenses
Selling, General & Administrative Expenses
Operating Earnings
Minority Interest
Net Operating Earnings to Centex
For the Years Ended March 31,
1999 1998 1997
(Dollars in millions)
$336.1 $297.3 $239.4
(213.6) (207.0) (172.4)
(2.2) (2.0) (2.6)
120.3 88.3 64.4
(51.1) (40.6) (31. 7)
$ 69.2 $ 47.7 $ 32.7
- - -
$339.5 $328.5 $286.8
- - -
$ 33.8 $ 13.5 $ 6.3
- - -
$ 16.2 $ 15.9 $ 13.8
- - -
Identifiable Assets
Capital Expenditures
Depreciation and Amortization
CONTRACTXNG AND CONSTRUCTXON SERVXCES
Contracting and Construction Services operations involve the construction of buildings for both private and
government interests, including (among others) office, commercial and industrial buildings, hospitals, hotels,
museums, libraries, airport facilities and educational institutions.
The following table sets forth financial information relating to the Contracting and Construction Services
operation. As this segment generates significant levels of balance sheet related cash flow, intracompany
interest income (credited at the prime rate in effect) is reflected in this segment. These amounts are
eliminated in consolidation.
Revenues
Construction Contract Costs
Selling, General & Administrative Expenses
Operating Income (loss), as reported
Intracompany Interest Income*
Total Economic Return
For the Years Ended March 31,
1999 1998 1997
(Dollars in millions)
$1,350.8 $953.8 $1,068.3
(1,292.8) (912.0) (1,037.5)
(42.8) (34. 6) (33.0)
15.2 7.2 (2.2)
7.2 5.2 5.3
$ 22.4 $ 12.4 $ 3.1
-
$ 256.7 $228.3 $ 227.5
-
$ 3.0 $ 2.3 $ 2.0
-
$ 2.6 $ 2.2 $ 2.5
-
Identifiable Assets*
Capital Expenditures
Depreciation and Amortization
*The "net assets" position af the Contracting and Construction Services segment provides significant cash flow because
payables and accruals consistently exceed identifiable assets. Intracompany interest income is computed on the group's
cash flow in excess of its equity.
8)
.
.
.
.
.
.
Centex corporation and subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
CORPORATE AND OTHER, NET
Corporate general and administrative expenses represent salaries and other costs not identifiable with
a specific segment. Other, net includes new business initiatives and other businesses which are not mature
enough to stand alone as separate business segments. Assets are primarily cash and cash equivalents,
receivables, property and equipment and other assets not associated with a business segment.
The following table summarizes financial information relating to the Corporate and other, net segments.
operating Loss, Other, net
Minority Interest
Net Operating Loss to Centex
Corporate General and Administrative Expenses
For the Years Ended March 31.,
1999 19'98 1997
(Dollars in millions)
$ (15.6) $ (7.4) $ (2.3)
(.2)
$ (15.6) $ (7.6) $ (2.3)
- - -
$ (28.1) $(21. 3) $(16.8)
- -
$112.1 $ 97.1 $ 61.4
- -
$ 7.8 $ 18.3 $ 6.6
- -- -
$ 6.9 $ 5.3 $ 2.3
- -- -
Identifiable Assets
capital Expenditures
Depreciation and Amortization
(J) FAIR VALUE OF FINANCIAL INSTRUMENTS
statement of Financial Accounting standards No. 107, "Disclosures about Fair Value of Finoncial Instruments,"
requires companies to disclose the estimated fair value of their financial instrument assets and liabilities.
The estimated fair values shown below have been determined using current quoted market prices where avail-
able and, where necessary, estimates based on present value methodology suitable for each category of
financial instruments. considerable judgment is required in interpreting market data to develop the estimates
of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that
the Company could realize in a current market exchange. All assets and liabilities which are not considered
financial instruments have been valued using historical cost accounting. There is no material difference
between the recorded amount and the estimated fair value of Centex Financial Services's off-balance-sheet
unfunded loan commitments. These are generally priced at market at the time of funding..
The consolidated carrying values of Cash and Cash Equivalents, other Receivables, Accounts Payable and
Accrued Liabilities and short-term Debt approximate their fair values. The carrying values and estimated fair
values of other financial assets and liabilities were as follows (dollars in thousands):
March 3'1,
1999
1998
Carrying
value
Carrying
value
Fair
Value
Fail'
Value
Financial Assets
Residential Mortgage Loans
Mortgage Securitization Residual Interest
Financial Liabilities
Long-term Debt
$1,425,105'R)
$ 80,152")
$1,191,450
$ 14,747
$1,213,455'A)
$ 14,747")
$1,395,616
$ 80,152
$ 289, 814'C)
$ 237,715
$ 256,779'C)
$ 284,299
(A) Fair values are based on quoted market prices for similar instruments.
(a) Fair value approximates carrying value far this asset.
(c) Fair values are based on a present value discounted cash flow with the discount rate approximating current market far
similar instruments.
@
Centex Corporation and subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(K) COMMITMENTS AND CONTINGENCIES
In order to ensure the future availability of land for home building, the Company has made deposits totaling
approximately $51 million as of March 31, 1999 for options to purchase undeveloped land and developed
lots having a total purchase price of approximately $1.3 billion. These options and commitments expire at
various dates to 2005. The Company has also committed to purchase land and developed lots totaling approxi-
mately $7 million. In addition, the Company has executed lot purchase contracts with the Partnership (see
Note F) which aggregate approximately $5 million.
Management believes that none of the litigation matters in which the Company or any subsidiary is involved
would have a material adverse effect on the consolidated financial condition or operations of the Company.
The Harrah's New Orleans Casino contract was suspended on November 22, 1995 due to a bankruptcy filing
by the Harrah's Jazz Company partnership, the developer of the casino. Centex and its subcontractors filed
claims against the partnership for completed but unpaid work. Centex also filed a lawsuit against Harrah's
Entertainment, Inc., parent company of the major partner in the partnership, to recover its claims. In late
November 1996, Centex and Harrah's reached a settlement conditioned upon Harrah's plan of reorganization
becoming effective. Harrah's plan became effective on October 30, 1998, at which time Harrah's paid $34
million to Centex in settlement of the claims of Centex and its subcontractors, and Centex resumed construc-
tion of the casino.
In October 1992, Martin County sued one of the Company's general contracting subsidiaries, Centex-Rooney
Construction Co., Inc. CRooney"), alleging defects in the design and construction of the Martin County
Courthouse in stuart, Florida. Rooney was construction manager of the project. In July 1996 and April 1997 ,
judgments totaling $17.4 million were returned against Rooney. As of March 31, 1999, the last appeal has
been settled and all judgments and related interest have been paid. of the approximately $22 million paid for
the judgments and related legal expenses, $13.2 million has been recovered from certain subcontractors
and their insurance carriers and certain surety companies. Rooney continues to prosecute claims and lawsuits
against other subcontractors, their insurance carriers and its own insurance carriers. While there can be no
assurance that Rooney will recover from those subcontractors and carriers, management believes that Rooney
will be able to recover substantially all of both judgments. Even if Rooney is unable to recover the balance of
these judgments, these judgments would not have a material impact on the financial condition of the Company.
The Company has certain deductible limits under its workers' compensation and automobile and general liability
insurance policies for which reserves are established based on the estimated costs of known and anticipated claims.
.
.
.
@
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Centex Corporotion and subsidiaries
REPOR.T OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE STOCKHOLDERS AND BOARD OF DIRECTORS OF CENTEX CORPORATION:
We have audited the accompanying consolidated balance sheets of Centex Corporation (a Nevada corporation)
and subsidiaries as of March 31, 1999 and 1998, and the related consolidated statements of earnings,
stockholders' equity, and cash flows for each of the three years in the period ended March 31, 1999. These
financial statements and the supplemental information referred to below are the responsibility of the
Company's management. Our responsibility is to express an opinion on these financial statements and supple-
mental information based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstotement. An oudit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall 'financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of Centex Corporation and subsidiaries as of March 31, 1999 and 1998, and the results of their
operations and their cash flows for each of the three years in the period ended March 31, 1999, in conformity
with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic consolidated financial statements
taken as a whole. The supplementol balance sheet data of Centex Corporation and Financial Services are
presented for purposes of additional analysis and are not 0 required part of the basic financial statements.
This information has been subjected to the ouditing procedures applied in our audits of the basic financial
statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial state-
ments taken as a whole.
Arthur Andersen LLP
Dallas, Texas,
May 12, 1999
@
Centex corporation and subsidiaries
MANACEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FISCAL YEAR 1999 COMPARED TO FISCAL YEAR 1998
Centex reported consolidated revenues of $5.2 billion for the fiscal year ended March 31,1999,30% above
$4.0 billion for the fiscal year ended March 31,1998. Earnings before income taxes were $373.3 million,
61% more than $231.6 million for last year. Net earnings for fiscal 1999 reached $232 million, a historical high
and a 60% improvement over net earnings of $144.8 million in fiscal 1998. Earnings per share for fiscal year
1999 were $3.90 and $3.75 for basic and diluted, respectively, compared to $2.45 and $2.36 for the prior year.
HOME BUILDING
Conventional Homes
The following summarizes conventional Homes's results for the two-year period ended March 31, 1999 (dollars
in millions, except per unit data):
1999 1998
conventional Homes Revenues
Cost of Sales
Selling, General & Administrative
operating Earnings
Units Closed
Unit Sales Price
% change
operating Earnings per Unit
% change
Backlog Units
% change
$ 2,819.4
(2,194.7)
(382.5)
$ 242.2
100.00/0
(77.8%)
(13.6%)
$2,312.0
(1,839.8)
(301. 7)
$ 170.5
100.0%
(79.6%)
(13.0%)
8.60/0
7.4%
14,792
$185,668
1.30/0
$ 16,375
19.20/0
6,792
38.20/0
12,418
$183,321
6.4%
$ 13,733
25.0%
4,916
14.1%
operating earnings for fiscal 1999 were higher as a percentage of revenues and on a per unit basis in com-
parison to fiscal 1998 as a result of the division's continued focus on improving operating margins as well as
an increase in units closed. Low interest rates, an expanding economy, and a reduction in direct construction
costs as a percentage of revenue are some of the major factors that impacted the operating results of the
conventional homes operation. Margin improvement initiatives include, among others, engineering the homes
to reduce the material and labor cost components, designing the product around consumer preferences and
the adoption of special purchasing and land development programs. The increase in sales price of approximate-
ly $2,300 is primarily a result of increased sales in the California market. The opening of new markets with
recent acquisitions also had a positive impact on the increase in number of units sold and the average sales
price. During fiscal 1999, the division continued to focus on margin improvement and began an emphasis on
top-line growth.
Manufactured Homes
Historically, Cavco has operated three manufactured home facilities in the phoenix area. A fourth plant
was opened near Albuquerque, New Mexico in August 1997. In January 1999, its fifth plant was opened in
central Texas. Cavco has expanded into the retailing of manufactured homes. During February 1998, Cavco
added retail distribution capabilities when it purchased substantially all of the assets of AAA Homes, Inc.,
Arizona's largest manufactured homes retailer. In July 1998, Cavco purchased a manufactured home retailer
in central Texas.
.
.
.
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Centex Corporation and subsidiaries
MANACEMENT'S DISCUSSION AND ANALYSIS OF fINANCIAL CONDITION AND RESULTS OF OPERATIONS
,
i
I (Con tin ued)
The following summarizes Manufactured Home's results for the two-year period ended March 31, 1999
(dollars in millions, except per unit data):
Manufactured Homes Revenues (Construction)
Cost of Sales
Selling, General f, Administrative Expenses
1999 1998
$ 137.7 100.00/0 $ 140.6 100.0%
(107.9) (78.3%) (113.7) (80.9%)
(13.9) (10.1%) (13.2) (9.4%)
--
$ 15.9 11. 60/0 $ 13.7 9.7%
--
$ 40.9 100.00/0 $ -%
(30.4) (74.3%) -%
(10.3) (25.2%) -%
--
$ 0.2 0.50/0 $ -%
--
$ 16.1 $ 13.7
(3.3) (2.3)
(2.5) (2.7)
--
$ 10.3 $ 8.7
- --
--
6,440 5,751
Retail Sales Revenues
Cost of Sales
Selling, General f, Administrotive Expenses
Construction and Retail Earnings
Goodwill Amortization
Minority Interest
Group operating Earnings
Units Sold
INVESTMENT REAL ESTATE
The following summarizes Investment Real Estate's results for the two-year period ended March 31, 1999
(dollars in millions):
11999
1998
Revenues
$ 33.7
$ 25.4
operating Earnings
$ 29.4
$ 28.2
Fiscal 1999 operating earnings from Investment Real Estate totaled $29.4 million compared to $28.2 million in
the prior year period. The timing of land sales is uncertain and can vary significantly from period to period.
Property sales related to Investment Real Estate's nominally valued assets (see Note G to the financial state-
ments) resulted in operating margins of $16.4 million in fiscal 1999 and $13.7 million in fiscal 1998. As of
March 31, 1999, the Investment Real Estate Group has approximately $75 million nominally valued assets which
are expected to be sold over the next four years.
Negative goodwill amortization was $16 million in both fiscal 1999 and 1998.
@
Centex Corporation and subsidiaries
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
FINANCIAL SERVICES
The Financial services segment consists primarily of home financing, home equity and sub-prime lending and
the sale of title and other insurance coverages. The following summarizes Financial Service's results for the
two-year period ended March 31, 1999 (dollars in millions):
Revenues
1999 1998
$ 436.3 $ 246.3
$ 92.3 $ 31.4
$11,112.5 $7,182.0
Operating Earnings
Origination Volume
Number of Loans Originated
CTX Mortgage Company -
Centex-built Homes (Builder)
Non-Centex-built Homes (Retail)
9,882 8,748
66,496 44,096
76,378 52,844
15,582 7,982
818 23
92,778 60,849
Centex Home Equity Corporation
Centex Finance Company
Financial Service's operating earnings for fiscal 1999 were $92.3 million, 194% higher than fiscal 1998 operat-
ing earnings of $31.4 million.
CTX Mortgage originations for fiscal 1999 increased 45% compared to fiscal 1998. The per loan margin for
fiscal 1999 was $1,118,49% higher than $748 per loan in fiscal 1998. CTX Mortgage's total mortgage applica-
tions for fiscal 1999 increased 33% to 78,126 from 58,835 applications reported for fiscal 1998. substantially
all of the mortgage loans generated by CTX Mortgage are sold forward upon closing and subsequently delivered
to third-party purchasers within approximately 60 days thereafter.
During fiscal 1999, Centex continued to expand Home Equity's sub-prime mortgage business. This expansion
resulted in a 95% increase in loan originations. Home Equity generated 82,803 sub-prime loan applications for
fiscal 1999, an increase of 196% over fiscal 1998. During fiscal 1999, Home Equity completed four securitiza-
tions totaling $890 million compared to one issue of $175 million in fiscal 1998. Home Equity is the long-term
servicer of the loans in these securitizations. Service fee income related to this long-term servicing was $4.5
million in fiscal 1999 and $0.2 million in fiscal 1998.
Centex Finance Company, the new manufactured homes finance operation, completed its second year of
operations in which originations increased to 818 loans compared to 23 loans in fiscal 1998. start-up costs for
this operation were $2.8 million for fiscal 1999.
Revenues include the gain on sale of mortgage loan receivables which increased to $254.1 million in fiscal
1999 from $135.8 million in fiscal 1998. This increase is attributed to the expansion of Financial Services's
product lines, the increased origination volume, and the favorable interest rate environment which resulted in
a significant volume of refinanced mortgages. The gain on sale of mortgage loans receivable includes the gain
recorded upon the completion of securitizations, gain on sale of servicing, and whole loan sales.
@
Centex Corporation and subsidiaries
MANACEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPER.ATIONS
I
I (continued)
In the normal course of its activities, Financial Services carries inventories of loans pending sale or securitiza-
tion and earns a positive spread between the interest income earned on those loans and its cost of financing
those loans (referred to herein as "positive carry"). Financial Services's sales and securitization volume
has increased significantly, contributing to an increase in the average level of loans held in inventory pend-
ing sale or securitization. Interest income increased $39.1 million or 67.6% to $97 million in fiscal 1999.
Interest expense increased $32 million or 71.3% to $76.9 million in fiscal 1999. As a result, positive carry has
increased to $20.1 million in fiscal 1999 compared to $13.0 million in fiscal 1998.
Financial Services's other sources of income include, among other things, loan origination fees, title policy
fees and insurance commissions, mortgage loan broker fees, and fees for mortgage loan quality control and
processing services. These other income sources increased $32.7 million or 62.1% in fiscal 1999 over fiscal
1998 due primarily to the fiscal 1999 increase in mortgage loan volume.
CONSTRUCTION PRODUCTS
Construction Products's revenues were $336.1 million for fiscal 1999, 13% above fiscal 1998 revenues of
$297.3 million. For the current year, Construction Products's pretax earnings, net to the Company's ownership
interest, were $69.2 million, a 45% increase over $47.7 million lost year.
Record results in the current year were attributable to continued strong product demand, hi~lher product
pricing and increased operating efficiency.
CONTRRCTING RND CONSTRUCTION SERVICES
The following summarizes contracting and Construction service's results for the two-year period ended
March 31, 1999 (dollars in millions):
Revenues
1999 1998
$1,350.8 $ 953.8
$ 15.2 $ 7.2
$1,128.0 $ 999.4
$ 936.8 $1,159.6
operating Earnings
New Contracts Received
Backlog of Uncompleted Contracts
Contracting and Construction Service's revenues for fiscal 1999 were $1,350.8 million, 42% more than last
year's revenues. Operating earnings for the group improved in fiscal 1999 as a result of a continuing shift in
recent years to higher-margin private negotiated projects rather than the lower-margin public bid work that
has historically been its specialty.
The Contracting and Construction Services operation provided a positive average annual net cash flow in
excess of Centex's investment in the group of $88.9 million in fiscal 1999 and $60.3 million in fiscal 1998.
FISCRL YERR 1998 COMPRRED TO FISCRL YERR 1997
Centex reported consolidated revenues of $4.0 billion for fiscal 1998, 5% above $3.8 billion for the year
ended March 31, 1997. Earnings before income taxes were $231.6 million, 42% more than $163.7 million for
fiscal 1997. Net earnings for fiscal 1998 reached $144.8 million, a 36% improvement over net earnings of
$106.6 million for the prior year. Earnings per share for fiscal year 1998 were $2.45 and $2.36 for basic and
diluted, respectively, compared to $1.86 and $1.80 for the prior year.
8
Centex Corporation and subsidiaries
(Continued)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
HOME BUILDING
Conventional Homes
The following summarizes Conventional Homes's results for the two-year period ended March 31, 1998
(dollars in millions, except per unit data):
1998 1997
Conventional Homes Revenues
Cost of sales
Selling, General & Administrative Expenses
operating Earnings
$ 2,312.0
(1,839.8)
(301. 7)
$ 170.5
100.0%
(79.6%)
(13.0%)
$ 2,299.6
(1,877.3)
(278.3)
$ 144.0
7.4%
units Closed
unit Sales Price
% Change
Operating Earnings per Unit
% Change
Backlog Units
% Change
12,418
$183,321
6.4%
$ 13,733
25.0%
4,916
14.1%
13,107
$172,296
5.1%
$ 10,990
23.3%
4,308
(22.1%)
100.0%
(81.6%)
(12.1%)
6.3%
Operating earnings for fiscal 1998 were higher as a percentage of revenues and on a per unit basis compared
to fiscal 1997 as a result of the division's focus on improving operating margins and more closings of higher
price and margin units in the Western region.
Conventional Homes reported 12,418 closings for fiscal 1998, 5% less than fiscal 1997 closings. Home orders
improved 10% to 13,026 units from 11,882 units in fiscal 1997 even though slightly fewer neighborhoods were
operating in fiscal 1998.
Manufactured Homes
During March 1997, Centex Real Estate Corporation acquired approximately 80% of Cavco Industries, Inc. Its
successor, Cavco Industries, LLC operates three manufactured homes facilities in the phoenix area and a plant
near Albuquerque, New Mexico.
The following summarizes Manufactured Homes's results for the year ended March 31, 1998 (dollars in millions):
Manufactured Homes Revenues (Construction)
Cost of Sales
Selling, General & Administrative Expenses
Goodwill Amortization
Minority Interest
Operating Earnings
1998
$ 140.6 100.0%
(113.7) (80.9%)
(13.2) (9.4%)
(2.3) (1. 6%)
(2.7) (1. 9%)
$ 8.7 6.2%
5,751
Units Sold
.11
e'l
~
1
1
@
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.
.
Centex Corporation and subsidiaries
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(continued)
INVESTMENT REAL ESTATE
The following summarizes Investment Real Estate's results for the two-year period ended March 31, 1998
(dollars in millions):
1998
1997
$ 25.4
$ 9.0
Revenues
Operating Earnings
$ 28.2
$ 17.9
Fiscal 1998 operating earnings from Investment Real Estate improved 58% to $28.2 million from $17.9 million
for fiscal 1997. The increased earnings can be attributed to increased land sales activity resulting from the
continued recovery in some of the real estate markets in which the company owns land. Property sales related
to Investment Real Estate's nominally valued real estate (see Note G to the financial statements) resulted in
operating margins of $13.7 million in fiscal 1998 and $4.5 million in fiscal 1997.
Negative Goodwill Amortization was $16 million in both fiscal 1998 and 1997.
FINANCIAL SERVICES
The Financial Services segment consists primarily of home financing, home equity and sub-prime lending and
the sale of title and other insurance coverages. The following summarizes Financial Services's results for the
two-year period ended March 31, 1998 (dollars in millions):
1998
1997
Revenues
$ 246.~:
$ 168.7
$ 24.4
Operating Earnings
$ 31A
Origination Volume
$7,182.0
$5,394.9
Number of Loans Originated
CTX Mortgage company -
Centex-built Homes (Builder)
Non-Centex-built Homes (Retail)
8,741l
44,096
9,483
33,579
43,062
4,100
Centex Home Equity corporation
Centex Finance company
52,844
7,982
23
60,849
47,162
Financial Service's operating earnings for fiscal 1998 were $31.4 million, 29% higher than fiscal 1997 operat-
ing earnings of $24.4 million, after expensing net expansion costs of $8.1 million related to Home Equity and
the new manufactured homes finance operation, Centex Finance Company.
CTX Mortgage originations for fiscal 1998 increased 23% compared to fiscal 1997. The per loan margin for
fiscal 1998 was $748,15% higher than $650 per loan in fiscal 1997. CTX Mortgage's total mortgage applica-
tions for fiscal 1998 increased 41% to 58,835 from 41,782 applications reported for fiscal 1997.
@
Centex Corporation and subsidiaries
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
.
During fiscal 1998, Centex substantially expanded Home Equity's sub-prime mortgage business, resulting in a
98% increase in loan originations. Home Equity generated 28,089 sub-prime loan applications for fiscal 1998,
an increase of 82% over fiscal 1997. In February 1998, Home Equity completed its first securitization of $175
million of sub-prime home equity mortgage loans.
CONSTRUCTION PRODUCTS
Construction Products's revenues were $297.3 million for fiscal 1998, 24% above fiscal 1997 revenues of
$239.4 million. For 1998, Construction Products's pretax earnings, net to Centex's ownership interest, were
$47.7 million, a 46% increase over $32.7 million in 1997.
Record results in 1998 were attributable to higher product sales pricing, increased operating efficiency and
continued strong product demand.
CONTRRCTING RND CONSTRUCTION .SERVICES
The following summarizes Contracting and Construction Service's results for the two-year period ended
March 31, 1998 (dollars in millions):
.
Revenues
1998 1997
$ 953.8 $1,068.3
$ 7.2 $ (2.2)
$ 999.4 $ 981.0
$1,159.6 $1,114.1 .
Operating Earnings (loss)
New Contracts Received
Backlog of Uncompleted Contracts
Contracting and Construction Service's revenues for fiscal 1998 were $953.8 million, 11% less than fiscal
1997 revenues. Operating earnings for the group improved in fiscal 1998 as a result of an increase in higher-
margin private negotiated projects compared to the lower-margin public bid work that has historically been
its specialty.
The Contracting and Construction Services operation provided a positive average annual net cash flow in
excess of Centex's investment in the group of $60.3 million in fiscal 1998 and $64.2 million in fiscal 1997.
FINRNCIAL CONDITION RND LIQUIDITY
At March 31,1999, the Company had cash and cash equivalents of $111.3 million, compared to $98.3 million
at the end of fiscal 1998. The net cash provided or used by the operating, investing, and financing activities
for the years ended March 31, 1999, 1998 and 1997 is summarized below (dollars in thousands):
For the Years Ended March 31.,
1999
1998
1997
NET CASH (USED IN) PROVIDED BY:
Operating activities
Investing activities
Financing activities
Net increase in cash
$ (254, 148)
(227,716)
494,816
$ 12,952
$(440,215)
(29,679)
536,890
$ 66,996
$257,508
(116,306)
(123,924)
$ 17,278
@
Centex Corporation and subsidiaries
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
For fiscal 1999 , cash was used in the operations to finance the increase in housing inventories and residential
mortgage loans. The increase in housing inventories relates to the increased level of sales and resultant units
under construction during the year, the acquisition of expansion land and the acquisition of three home-
builders during fiscal 1999. The increase in residential mortgage loans relates to the higher' volume of loan
originations during the year by both CTX Mortgage and Home Equity. Cash was also used to fund additional
investments in Centex Development Company, L.P. and joint ventures and the additions to property and equip-
ment (primarily in the Construction Products segment for new production capacity). The funds provided by
financing activities included $244 million of net new short-term bank borrowings by the Finclncial services seg-
ment to finance the growth in residential mortgage loans. Most of the remainder was provided by short-term
corporate debt to fund the increased home building activity.
short-term debt as of March 31,1999 was $1.6 billion, which included $1.3 billion of debt clpplicable to the
Financial Services operation. The majority of the Financial Services debt is collateralized by ~esidential mort-
gage loans, and thus requires only limited support by Centex Corporation. Most of the Company's corporate
borrowings are accomplished at prevailing market interest rates through short-term borrowings from uncom-
mitted bank facilities and the Company's commercial paper programs. The Company maintains $660 million of
committed credit facilities which serve as a back-up for bank and commercial paper borrowings. under the
terms of the agreement on one of these facilities, $170 million moy be borrowed directly by CTX Mortgage. The
weighted average interest rate of short-term indebtedness outstanding during fiscal 1999 was 6.0%. The
weighted average interest rate of balances outstanding at March 31, 1999 was 5.6%.
The Finoncial Services segment provides most of its own short-term financing needs through separate facilities
which provide for limited support from Centex Corporation. CTX Mortgage Company has its own $1.1 billion of
secured committed mortgage warehouse facilities which includes a $200 million (increased to $300 million in
April 1999) asset-backed commercial paper program. In addition, it has another $665 million of uncommitted
credit facilities. All of these facilities are used to finance mortgages that are held during the period they are
being securitized and readied for delivery against forward sale commitments. Centex Home Equity Corporation
has its own $300 million (reduced to $250 million in April 1999) of committed and $110 million of uncommitted
secured mortgage warehouse facilities to finance sub-prime mortgages held until securitization.
The long-term debt outstanding as of March 31, 1999 was as follows (in thousands):
Subordinated Debentures, 7.375%, due in 2005
Subordinated Debentures, 8.75%, due in 2007
Other Indebtedness, 6.0% to 9.6%, due through 2027
$ 99,698
99,473
85,128
$284,299
Maturities of long-term debt during the next five years (in thousands) are: 2000, $3,910; 2001, $60,668;
2002, $1,625; 2003, $15,305; and 2004, $205.
The Company believes it has adequate resources and sufficient credit facilities to satisfy its current needs
and to provide for future growth.
(~
Centex corporation and subsidiaries
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
STOCK REPURCHRSE PROGRRM
since April 1998, the Company has repurchased 714,800 shares of common stock under its stock option-
related repurchase program. The Company plans to continue to repurchase shares under this program.
YERR 2000 COMPLIRNCE
The Company has a variety of operating systems, computer software applications, computer hardware equip-
ment (collectively, "IT systems") and other equipment with embedded electronic circuits, including applica-
tions that the Company uses in its administrative functions and in the operations of its various subsidiaries
and business divisions (collectively, the "Non-IT Systems" and together with the IT Systems, the "Systems").
Because resolution of Year 2000 issues is considered a priority of the Company, the Company created a Year
2000 Task Force to oversee the company's Year 2000 compliance. The Task Force, consisting of members of
the Company's management and accounting, financial planning, legal, and internal audit departments, has
oversight of the information systems managers and other administrative personnel charged with implementing
the Company's Year 2000 compliance program (collectively, the "Year 2000 Compliance Team").
The Task Force has surveyed the Year 2000 Compliance Team regarding the Year 2000 compliance of the
Systems. The surveys indicated that a small number of the Systems are not Year 2000 compliant. Affected
Systems are primarily Non-IT Systems that are not critical to the material operations of the Company and its
subsidiaries. The Company and its subsidiaries have replaced many of these Systems and are in the process of
replacing others. All non-compliant Systems will be replaced no later than september 30, 1999. In substantial-
ly all of the cases, the replacement of or upgrading to the non-compliant Systems (i) has occurred or will occur
for reasons unrelated to the non-compliance of the Systems and (ii) has not been accelerated as a result of
the non-compliance of such Systems. To date, the timetable for addressing non-compliance of Systems has
been substantially the same for both IT Systems and Non-IT Systems. The Company anticipates that this will
continue to be the case as it completes its Year 2000 program.
The Company does not believe (i) that the non-compliant Systems pose a material risk to the financial condition
of the Company or of the individual operations of subsidiaries or operating divisions that currently have
non-compliant Systems or (ii) that the cost of replacing, upgrading or otherwise changing the non-compliant
Systems is material to the Company or to the individual subsidiaries or operating divisions. The Company
has used, and will continue to use, internally generated cash to fund the correction of Systems that are
not compliant.
In order to further confirm the Company's Year 2000 readiness, the Company engaged the services of a third-
party consulting firm to evaluate its Year 2000 readiness program. The consulting firm's review was completed
during the fourth quarter of fiscal 1999. The firm's conclusions are consistent with the company's internal
determinations of its Year 2000 readiness. The Company has adopted the consulting firm's recommendations
for achieving Year 2000 compliance.
The Task Force is finalizing its Year 2000 contingency plan and expects to have it completed no later than
september 30, 1999.
@
.
.
.
Centex corporation and subsidiaries
MANACEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
As a result of the Company's Year 2000 compliance program, the Company believes that it is highly unlikely
that any interruption to its operations resulting from a compliance failure will have a material adverse effect
on the operations or financial condition of the Company as a whole or of any operating subsidiary or division.
Achieving Year 2000 compliance is dependent on many factors, however, and some of these factors are
not completely within the Company's control. Although the Company and its subsidiaries obtain information,
materials and services from numerous sources and provide goods and services to numerous customers, the
failure of these third-parties (including U.S. government agencies) to achieve Year 2000 reodiness may
adversely impact the Company's operations. Although most of the Company's Year 2000 readiness program is
substantially the same across the businesses of the Company's various subsidiaries, the Company believes
that non-compliance of third parties in its financial services operations could have a greater effect on the
Company than the non-complionce of third parties in its less technology-intensive operations such as general
contracting and home building.
The Company believes the most likely Yeor 2000 worst-case scenario would be the failure of some significant
vendors, subcontractors or other third parties to achieve compliance, resulting in a slowdown of the
Company's operations. The Company is not aware of any such third parties that are not Year 2000 compliant.
In order to address the potential non-compliance of third parties affecting the Company's operations, the
Company continues to survey its largest customers, subcontractors, and vendors by sending requests for dis-
closure of Year 2000 readiness. The Company anticipates completing such survey by the Fall of 1999.
Year 2000 Forward-looking statements
certain statements in this section, other thon historical information, are forward-looking statements within
the meaning of section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934
and the Private Securities litigation Reform Act of 1995. Forward-looking statements may be identified by the
context of the statement and generally arise when the Company is discussing its beliefs, estimates or expec-
tations. These statements involve risks and uncertainties relative to the Company's ability to assess and
remediate any Year 2000 compliance issues, the ability of third parties to correct material non-compliant sys-
tems, (md the Company's assessment of the Year 2000 issue's impact on its financial results and operations.
OTHER DEVELOPMENTS AND OUTLOOK
During April 1998, the Company's Home Building subsidiary purchased approximately 90% of Wayne Homes, Inc.
Prior to the acquisition, Wayne Homes was a privately owned company. Wayne Homes, a 25-year-old builder
that constructs homes on customer-owned sites in widely diverse locations, operates in eight Ohio markets.
The company delivers approximately 600 homes annually at on average sales price of approximately $100,000.
This acquisition is consistent with Centex's strategy of diversifying into more segments of the home building
market. In May 1998, Teal Homes was acquired by the Company's Home Building subsidiary. Teal Homes builds
approximately 180 homes annually in the Richmond, Virginia market. This acquisition is also consistent with the
Company's growth strategy and offered an immediate entry into the growing Richmond market.
In December 1998, Centex Real Estate Corporation, the home building subsidiary of Centex Corporation,
purchased Calton Homes, Inc. Calton Homes builds and sells single-family homes in central New Jersey. During
its fiscal year ended November 30, 1997, Calton Homes delivered 226 homes at an average sales price of
$277,000. Calton Homes's customers include second and third-time move-up as well as "active adult" home
buyers. Management believes this acquisition will substantially increase the Company's presence in New Jersey
and that Calton Homes's management team will help expand centex's operations in the Northeast.
The total cost for these three home building acquisitions was approximately $124 million.
(3
Centex Corporation and subsidiaries
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Also during the year, Centex announced the formation of a new subsidiary, Centex Latin America, Inc.,
which will pursue investments in housing companies operating in Mexico and in other Latin American markets,
including Argentina, Brazil and Chile.
Centex enters fiscal 2000 with a record housing backlog and excellent prospects in each of its other
businesses. Assuming the prevailing favorable economic environment continues, earnings for the current
fiscal year should exceed fiscal 1999 results.
FORWARD LOOKING STATEMENTS
The Management's Discussion and Analysis of Financial Condition and Results of Operations and other sections
of this Annual Report contain forward-looking statements within the meaning of section 27A of the Securities
Act of 1933, section 21E of the Securities Exchange Act of 1934 and the Private securities Litigation Reform
Act of 1995. Forward-looking statements may be identified by the context of the statement and generally
arise when the Company is discussing its beliefs, estimates or expectations. These statements are not guaran-
tees of future performance and involve a number of risks and uncertainties. Actual results and outcomes may
differ materially from what is expressed or forecast in such forward-looking statements. The principal risks
and uncertainties that may affect the Company's actual performance and results of operations include the
following: general economic conditions and interest rates; the cyclical and seasonal nature of the Company's
businesses; adverse weather; changes in property taxes and energy costs; changes in federal income tax laws
and federal mortgage financing programs; governmental regulation; changes in governmental and public poli-
cy; changes in economic conditions specific to anyone or more of the company's markets and businesses; com-
petition; availability of raw materials; and unexpected operations difficulties. Other risks and uncertainties
may also affect the outcome of the company's actual performance and results of operations.
.
.
.
@
(~
Centex Corporation and subsidiaries
SUMMARY OF SELECTED FINANCIAL DATA (UNAUDITED) .'
(Dol/ars in thousands, except per share data)
1999 1998 1997 1996
Revenues $5,154,840 $3,975,450 $3,784,991 $3,102,987
Net Earnings Before 1995 Construction
Products's IPO Gain $ 231,962 $ 144,806 $ 106,563 $ 53,365
Gain on Construction Products's IPO
Net Earnings $ 231,962 $ 144,806 $ 106,563 $ 53,365
Total Assets $4,334,746 $3,416,219 $2,678,829 $2,336,966
Total Long-term Debt, Consolidated $ 284,299 $ 237,715 $ 236,769 $ 321,002
Total Debt, Consolidated $1,910,899 $1,390,588 $ 864,287 $ 983,269
Total Debt (with Financial Services
reflected on the equity method) $ 587,955 $ 311,538 $ 283,769 $ 408,253
Deferred Income Tax (Asset) Liability $ (49,107) $ (147,607) $ (197,413) $ 16,620
Debt as a Percentage of Capitalization (0)
Total Debt, Consolidated 57.60/0 53.1% 44.5% 57.1%
Total Debt (with Financial Services
reflected on the equity method) 29.50/0 20.3% 20.9% 35.6%
stockholders' Equity $1,197,639 $ 991,172 $ 835,777 $ 722,836
Net Earnings as a Percentage of
Beginning stockholders' Equity 23.40/0 17.3% 14.7% 8.0%
Per Common share
Earnings Per share - Basic .
Before Construction Products's IPO Gain $ 3.90 $ 2.45 $ 1.86 $ .94
Construction Products's IPO Gain I
$ 3.90 $ 2.45 $ 1.86 $ .94
Earnings Per Share - Diluted
Before Construction Products's IPO Gain $ 3.75 $ 2.36 $ 1. 80 $ .91
Construction Products's IPO Gain
$ 3.75 $ 2.36 $ 1. 80 $ .91
Cash Dividends $ .16 $ .135 $ .10 $ .10
Book Value Based on Shares Outstanding
at Year End $ 20.17 $ 16.65 $ 14.40 $ 12.72
stock Prices
High $ 45'/. $ 40'/. $ 20'/8 $ 1713/16
Low $ 26 $ 16'1. $ 12'"/16 $ 11'/.
On November ::sO, 1987, Centex Corporation distributed as a dividend ta its stockholders securities relating to Centex Development
Company, L.P. (See Note F ta the Consolidoted Financiol Statements of Centex corporation and Subsidiaries). Since this distribution,
such securities have troded in tandem with, and as a part af, the cammon stock of Centex Corporation.
(A) Capitalization is composed of Total Debt, Deferred Income Tax liability, Negative Goodwill, Minority Interest and stockholders' Equity.
.
@
Centex corporation and subsidiaries
. SUMMAR.Y OF SELECTED FINANCIAL DATA (UNAUDITED)
I
(Continued)
For the Years Ended March 3'1,
1995 1994 1993 1992 1991 '.990
$3,277,504 $3,214,482 $2,502,692 $2,165,707 $2,243,836 $2,072,644
$ 54,753 $ 85,162 $ 61,038 $ 34,557 $ 43,605 $ 62,003
37,495
$ 92,248 $ 85,162 $ 61,038 $ 34,557 $ 43,605 $ 62,003
$2,049,698 $2,580,356 $2,272,093 $2,347,452 $2,037,486 $2,045,141
$ 222,530 $ 222,832 $ 223,988 $ 232,294 $ 137,235 $ 140,112
$ 798,790 $1,006,417 $ 861,558 $ 831,308 $ 546,946 $ 492,029
$ 427,381 $ 429,470 $ 368,988 $ 298,508 $ 267,946 $ 267,739
$ 26,737 $ 51,180 $ 72,784 $ 70,874 $ 79,425 $ 58,329
53.5% 57.5% 55.9% 57.2% 47.8% 47.5%
38.1% 36.6% 35.2% 32.5% 30.9% 33.0%
$ 668,227 $ 668,659 $ 578,415 $ 518,494 $ 483,677 $ '~47,911
13.8% 14.7% 11.8% 7.1% 9.7% 16.1%
. $ .93 $ 1. 35 $ .99 $ .57 $ .72 $ 1.04
.63
$ 1. 56 $ 1. 35 $ .99 $ .57 $ .72 $ 1.04
$ .90 $ 1. 29 $ .95 $ .55 $ .71 $ 1.00
.61
$ 1. 51 $ 1.29 $ .95 $ .55 $ .71 $ 1.00
$ .10 $ .10 $ .10 $ .10 $ .10 $ .10
$ 11.90 $ 10.56 $ 9.29 $ 8.50 $ 8.04 $ 7.43
$ 16'/,6 $ 22"/" $ 17'/" $ 13"/" $ 101"/" $ 1 0'/"
$ 10'/. $ 13'/, $ 10 $ 8'/, $ 4'/. $ 7
.
@
Centex Development Compony (:I:I:n Holding Corporotion,
:I:I:I:I Development Corporation, Centex Development Company, L.P.)
TO OUR STOCKHOLDERS:
3333 Holding Corporation, 3333 Development Corporation, and Centex Development Company, L.P. (the
"Partnership"), (together the "Companies"), reported, on a combined basis, net income of $430,000 for the
fiscal year ended March 31, 1999 compared to $4.4 million in the prior year. The Companies reported combined
revenues of $28.6 million in fiscal 1999, a 42% increase over revenues of $20.1 million in the prior year.
Revenues increased considerably from the prior year, primarily as a result of the Partnership's new home build-
ing operation in New Jersey. However, net earnings were down compared to the prior year, due to fewer land
sales and the up-front cost associated with the Companies' continued initiatives to broaden their multi-family
and commercial development operations. Land sales, which were lower in fiscal 1999 than in the prior year,
included the sale of 319 single-family lots to Centex Homes in Florida and Texas and two commercial parcels in
the Dallas, Texas metroplex.
The Partnership entered the single-family home building business in New Jersey in order to maximize the value
of the major land position it holds in East Windsor. During fiscal 1999, the home building operation generated
revenues of $21.2 million and operating earnings of $1.6 million from the sale of 73 single-family homes.
During the year, the Partnership began construction on four industrial facilities and one office facility total-
ing 634,000 square feet located in North Carolina, Florida and California. Completion of these projects, which
are 60% pre-leased, is scheduled for early fiscal 2000. The Partnership also completed construction of a
304-unit pre-sold apartment community located in The Colony, Texas, which is scheduled to close in early
fiscal 2000, and started construction on a 400-unit apartment complex located in Grand Prairie, Texas. In
addition, the Partnership acquired land in st. Petersburg, Florida for a 776-unit apartment community.
During fiscal 1999, the Partnership initiated significant new development projects and continued to explore
development opportunities in new markets that will enhance earnings in fiscal 2000 and future yeors. The
Partnership develops certain properties for sale and holds others for investment, particularly those that
generate attractive earnings and cash flow. Subsequent to year end, the Partnership consummated the acqui-
sition of Fairclough Homes, a united Kingdom home builder that builds approximately 1,700 homes annually.
Although the Fairclough Homes operations will generate significant earnings, the transaction was innovatively
structured with the seller retaining a special class of Fairclough's stock that is allocated the mojor portion
of Fairclough's earnings for the first two years. In return, the Partnership was able to purchase Fairclough
by issuing two-year, non-interest bearing notes for 100% of the approximate $225 million purchase price.
Additionally, the Partnership assumes overall management control, ensuring that Fairclough will meet our
performance standards by the time the acquisition notes are funded. The acquisition provides the base for
our strategic goal of creating a significant pan-European home building operation.
The Companies entered fiscal 2000 with numerous opportunities that are very attractive near-term and have
outstanding long-term potential.
-/eiw(l /J~
Richard C. Decker
Chairman, President and Chief Executive Officer
May 12, 1999
8
.
.
.
.
.
.
Centex Development company (3333 Holding Corporation,
3333 Development Corporotion, Centex Development Compony, L.P.)
REPORT OF INDEPENDENT PUBLJ:C ACCOUNTANTS
TO THE BOARD Of DIRECTORS OF 3333 HOLDING CORPORATION:
We have audited the accompanying combining balance sheets of 3333 Holding corporation and subsidiary
and Centex Development Company, L. P. and subsidiaries as of March 31, 1999 and 1998, and the related com-
bining statements of operations, cash flows, and stockholders' equity and partners' capital for each of the
three years in the period ended March 31, 1999. These financial statements are the responsibility of the
Companies' management. Our responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. Rn audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Rn audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the individual
and combined financial positions of 3333 Holding Corporation and subsidiary and Centex Development Com-
pany, L.P. and subsidiaries as of March 31, 1999 and 1998, and the individual and combined results of their
operations and their cash flows for each of the three years in the period ended March 31, 1999, in conformity
with generally accepted accounting principles.
Rrthur Rndersen LLP
Dallas, Texas,
May 12, 1999
@
Centex Development Company (3333 Holding Corporation,
3333 Development Corporation, Centex Development Company, L.P.)
FINANCIAL HIGHLIGHTS (UNAUDITED)
Dollars in thousands, except per share/unit data)
REVENUES
3333 Holding Corporation and Subsidiary
Centex Development Company, L. P.
Combined Revenues
OPERATJ:NG EARNJ:NGS (Loss)
3333 Holding Corporation and Subsidiary
Centex Development Company, L. P.
Combined Operating Earnings (Loss)
TOTAL ASSETS
3333 Holding Corporation and Subsidiary
Centex Development Company, L.P.
Combined Assets
TOTAL DEBT
3333 Holding Corporation and Subsidiary
Centex Development Company, L.P.
Combined Debt
OPERATJ:NG EARNJ:NGS (Loss)
PER SHARE/UNJ:T
3333 Holding Corporation and Subsidiary
Centex Development Company, L. P.
AVERAGE SHARES/UNJ:TS OUTSTANDJ:NG
3333 Holding Corporation and
Subsidiary (shores)
Centex Development Company, L.P. (units)
1999
$ 1,103
$ 28,228
$ 28,618
$ (1,385)
$ 1,815
$ 430
$ 2,522
$113,233
$112,176
$ 582
$ 41,896
$ 42,478
$ (1,385)
$ 33.38
1,000
54,377
1998
$ 1,505
$19,618
$20,121
$ (125)
$ 4,524
$ 4,399
$10,423
$59,260
$60,497
$ 1,480
$13,821
$15,301
$ (125)
$140.14
1,000
32,281
For the Years Ended March 31,
1997
$ 1,664
$ 9,026
$ 9,529
$
$
$
$ 8,648
$42,978
$50,127
$ 7,000
$ 7,055
$14,055
$ 206
$ 22.29
1,000
32,260
1996
$ 2,045
$13,943
$14,470
206
719
925
$
$
$
$ 8,652
$43,168
$50,786
$ 7,600
$ 3,326
$10,926
$ 253
$ 0.74
1,000
32,260
1995
$ 1,602
$ 9,796
$ 10,342
253
24
277
$ 96
$(16,323)
$(16,227)
$ 8,673
$105,946
$113,282
$ 7,600
$ 56,485
$ 64,085
$ 96
$(505.98)
1,000
32,260
@
.
.
.
Centex Development Compony (3333 Holding Corporotion,
. 3333 Development Corporation, Centex Development Company, L.P.)
COMBINING BALANCE SHEETS
I (Dollars in thousands)
March 31,
1999 1998 1999 1998 1999 1998
Centex Development 3333 Holding Corporation
Combined Company, L.P. and subsidiaries and subsidiary
ASSETS
Cash $ 364 $ 260 $ 331 $ 259 $ 33 $ 1
Accounts Receivable -
Affiliates 1,963 7,921 416
Centex Corporation and Subsidiaries 38 180 38 180
Other 1,142 796 1,132 631 10 165
Notes Receivable -
Centex Corporation and Subsidiaries 7,700 7,700
Other 3,554 5,110 3,554 5,110
Investment in Affiliate 1,616 849
Investment in Real Estate Joint Ventures 672 3,040 672 2,478 562
Commercial Properties, net 1,899 1,946 1,899 1,946
Projects Under Development and
Held for Sale 102,764 41,265 102,389 40,815 375 450
Property and Equipment, net 231 88 89 142 88
Other Assets 1,512 112 1,166 100 346 12
. $112,176 $60,497 $113,233 $59,260 $ 2,522 $10,423
LIABILITIES, STOCKHOLDERS'
EQUITY AND PARTNERS' CAPITAL
Accounts Payable and Accrued Liabilities -
Affiliates $ $ $ $ 503 $ 1,963 $ 7,916
Centex Corporation and Subsidiaries 751 948 332 877 419 71
Other 8,217 3,393 8,676 2,990 390 403
Notes Payable -
Centex Corporation and Subsidiaries 582 1,480 582 1,480
other 41,896 13,821 41,896 13,821
Stockholders' Equity and Partners' Capital-
Stock and Stock/Class B Unit Warrants 501 501 500 500 1 1
Capital in Excess of Par Value 800 800 800 800
Retained Earnings (Deficit) (1,633) (248) (1,633) (248)
Partners' Capital 61,062 39,802 61,829 40,569
Total Stockholders' Equity and
Partners' Capital 60,730 40,855 62,329 41,069 (832) 553
$112,176 $60,497 $113,233 $59,260 $ 2,522 $10,423
See notes to combining financial statements.
.
@
Centex Development Company (:J:J:J:J Holding Corporation,
:J:J:J:J Development corporotion, Centex Development Compony, L.P.)
.
COMBINING STATEMENTS OF OPERATIONS
I (Dollars in thousands, except per shore/unit data)
REVENUES
Real Estate Sales
Interest and other Income
COSTS AND EXPENSES
Cost of Real Estate Sold
Selling, General and
Administrative Expenses
Interest
EARNINGS (Loss) BEFORE
INCOME TAXES
Income Taxes
NET EARNJ:NGS (Loss)
NET EARNJ:NGS
ALLOCABLE TO
LJ:MJ:TED PARTNERS
NET EARNJ:NGS (Loss)
PER UNJ:T/SHARE
WEJ:GHTED-AVERAGE UNJ:TS/
SHARES OUTSTANDJ:NG
For the Years Ended March 31,
1999
1998
1998
1999
1997
1997
1999
1997
1998
Combined
Centex Development
Company, loP. and Subsidiaries
3333 Holding Corporation
and Subsidiary
$27,437 $18,939 $8,270 $27,437 $18,939 $8,270 $ - $ - $ -
1,181 1,182 1,259 791 679 756 1,103 1,505 1,664
- -
28,618 20,121 9,529 28,228 19,618 9,026 1,103 1,505 1,664
- - -
22,755 13,585 6,772 22,755 13,585 6,772 - - -
5,123 1,745 1,324 3,567 1,489 1,535 2,269 913 740
310 392 508 91 20 - 219 717 718
- - - -
28,188 15,722 8,604 26,413 15,094 8,307 2,488 1,630 1,458
-
430 4,399 925 1,815 4,524 719 (1,385) (125) 206
- - - - - - - - -
- - --
$ 430 $ 4,399 $ 925 $ 1,815 $ 4,524 $ 719 $(1,385) $(125)$206
- - --
--
$ 1,815 $ 4,524 $ 719
-
$ 33.38 $140.14 $22.29 $(1,385) $(125)$206
- --
--
54,377 32,281 32,260 1,000 1,000 1,000
.
See notes to combining financial statements.
.
@
For the Years Ended March :51,
.
Centex Development Compony (:J:J:J:J Holding Corporotion,
3333 Development corporation, Centex Development Company, L.P.)
(Dollars in thousands)
COMBINING STATEMENTS OF CASH FLOWS
cash Flows - Operating Activities
Net Earnings (loss)
Adjustments -
Depreciation and Amortization
(Increase) Decrease in
Receivables
Decrease (Increase) in
Notes Receivable
(Increase) Decrease in
Projects Held for
Development and Sale
Decrease (Increase) in
Commercial Properties
Increase in other Assets
Increase (Decrease) in
Payables and Accruals
.
Cash Flows - Investing Activities
Decrease (Increase) in Advances
to Joint Ventures
Property and Equipment
Additions, net
Cash Flows - Financing Activities
(Decrease) Increase in
Notes Payable
Centex Corporation and
subsidiaries
Other
Decrease in Notes Receivable -
Centex Corporation and
Subsidiaries
Issuance of Class C
Partnership units
capital Distributions -
Return of Capital
Preference Payments
Net Increase (Decrease) in Cash
Cash at Beginning of Year
Cash at End of Year
1999
1997
1999
1997
1998
1999
1998
1997
1998
combined
Centex Development
Company, L.P. and Subsidiaries
3333 Holding Corporation
and Subsidiary
$ 430 $4,399 $ 925 $ 1,815 $4,524 $ 719 $(1,385) $(125) $206
115 15 - 78 10 - 37 5 -
(204) (664) 58 5,419 (7,684) (420) 751 (585) 3
1,556 (2,745) 1,444 1,556 (2,745) 1,444 - - -
(43,054) 5,195 (412) (43,129) 5,645 (412) 75 (450) -
6 (1,956) - 6 (1,956) - - - -
(1,400) (112) - (1,066) (100) - (334) (12) -
4,627 1,683 (223) 4,638 1,950 (138) (5,618) 7,420 390
- - -
(37,924) 5,815 1,792 (30,683) (356) 1,193 (6,474) 6,253 599
- - -
2,368 (2,838) (22) 1,806 (2,276) (22) (205) (644) -
(217) (93) - (126) - - (91) (93) -
- - - --
2,151 (2,931) (22) 1,680 (2,276) (22) (296) (737) -
- - - --
(898) (5,520) (600) - - - (898) (5,520) (600)
28,075 6,766 3,729 28,075 6,766 3,729 - - -
7,700 - - - - - 7,700 - -
1,000 - - 1,000 - - - - -
- - (4,500) - - (4,500) - - -
- (4,500) - - (4,500) - - - -
- - - -
35,877 (3,254) (1,371) 29,075 2,266 (771) 6,802 (5,520) (600)
-- - --
104 (370) 399 72 (366) 400 32 (4) (1)
260 630 231 259 625 225 1 5 6
- - - - - -
$ 364 $ 260 $ 630 $ 331 $ 259 $ 625 $ 33 $ 1 $ 5
- - - - - -
See notes to combining financial statements.
.
@
Centex Development Compony (:J:J:J:J Holding Corporotion,
:J:J:J:J Development Corporation, Centex Development Company, L.P.)
(Dollars in thousands)
COMBINING STATEMENTS OF STOCKHOLDERS' EQUITY AND PARTNERS' CAPITAL
.
For the Vears Ended March J1, 1999, 1998 and 1997
3333 Holding
Corporation and Subsidiary
class B General
unit Partner's
Centex Development Company, L.P. and subsidiaries
limited
Partner's
Retained
Earnings
(Deficit)
Combined
Warrants Capital
Balance at March 31, 1996
Return of Capital
Net Earnings
Balance at March 31, 1997
Preference Payments
Issuance of Class C Partnership Units
Net Earnings (Loss)
Balance at March 31, 1998
Issuance of Class C Partnership Units
Net Earnings (Loss)
Balance at March 31, 1999
$36,989 $500
(4,500)
925
$767
33,414
(4,500)
7,542
4,399
500
767
40,855
19,445
430
500
767
$60,730 $500
$767
See notes to combining financial statements.
NOTES TO COMBINING FINANCIAL STATEMENTS
(A) ORGANIZATION
Capital In
stock Excess Of
Warrants Par Value
Capital
$36,017
(4,500)
719
$1
$800 $ (329)
206
32,236
(4,500)
7,542
4,524
(123)
1
800
800
(125)
(248)
39,802
19,445
1,815
$61,062
~
(1,385)
$800 $(1,633)
.
In March 1987, Centex Development Company, L.P. (the "Partnership"), a master limited partnership, was
formed to enable holders of Centex corporation ("Centex") stock to participate in long-term real estate
development projects whose dynamics are inconsistent with Centex's traditional financial objectives.
Certain of Centex's subsidiaries contributed to the Partnership properties with a historical cost basis (which
approximated market value) of approximately $76 million in exchange for 1,000 limited partnership units
("Class R units").
The Partnership is a limited partnership which is controlled by its general partner, 3333 Development
Corporation ("Development"), a wholly-owned subsidiary of 3333 Holding Corporation ("Holding"). Holding is a
separate public company whose stock trades in tandem with Centex's stock. The common stock of Holding was
distributed in 1987 (with warrants to purchase approximately 80% of the Class B limited partnership units in
the Partnership) as a dividend to the stockholders of Centex and is held by a nominee. These securities, held
by the nominee on behalf of the stockholders, will trade in tandem with the common stock of Centex until
such time as they are detached. The securities may be detached at any time by Centex's Board of Directors but
the warrants to purchase Class B units automatically become detached in November 2007.
The three-person Board of Directors of Holding is elected by the stockholders of Centex. Two of the Board
members, representing the majority of the Board, are independent outside directors who are also not direc-
tors of Centex. Thus the general partner of the Partnership is controlled by the stockholders of Centex. The
general partner and independent board of Holding manage how the Partnership conducts its activities includ-
ing the sales, development, maintenance and zoning of properties. The general partner may sell or acquire
properties, including the contributed property, and enter into other business transactions without the con-
sent of the limited partners. In addition, the limited partners cannot remove the general partner.
.
B
~
Centex Development Compony (JJJJ Holding Corporotion,
JJJJ Development Corporotion, Centex Development Company, LP.)
NOTES TO COMBINING FINANCIAL STATEMENTS
I (continued)
Supplementary condensed combined financial statements of Centex Corporation and subsidiaries, 3333
Holding Corporation and subsidiary and Centex Development Company, loP. and subsidiaries are set forth
below. For additional information on Centex Corporation and subsidiaries, see their separate financial
statements and related footnotes.
SUPPLEMENTARY CONDENSED COMBINED BALANCE SHEETS
(Dollors in thousands)
1999
1998
March 31,
ASSETS
Cash and Cash Equivalents
Receivables
Inventories
Investments in Joint Ventures and other
Property and Equipment, net
other Assets
$ 111,632
1,860,090
1,639,664
49,266
313,886
410,321
$4,384,859
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable and Accrued Liabilities
Short-term Debt
Long-term Debt
Minority stockholders' Interest
Negative Goodwill
Stockholders' Equity
$1,026,867
1,668,496
284,299
140,721
66,837
1,197,639
$4,384,859
SUPPLEMENTARY CONDENSED COMBINED STATEMENTS OF EARNINGS
(Dollars in thousands)
$ 98,S76
1,588,247
1,107,941
10,598
296,080
333,044
$3,434,486
$ 802,547
1,166,694
237,715
152,468
82,837
992,225
$3,434,486
For the Years Ended March 31,
1999 1998 1997
$5,179,188 $3,991,954 $3,793,621
4,805,894 3,760,445 3,629,672
373,294 231,509 163,949
141,332 86,828 57,180
$ 231,962 $ 144,681 $ 106,769
Revenues
Costs and Expenses
Earnings Before Income Taxes
Income Taxes
Net Earnings
(B) BASIS OF PRESENTATION
The accompanying combining financial statements present the individual and combined financial statements of
Holding and its subsidiary and the Partnership as of March 31, 1999 and 1998 and results of operations for
each of the three years ended March 31, 1999. The financial statements of the Partnership are included in
the combined statements since Development, as general partner of the Partnership, is able to exercise effec-
tive control over the Partnership.
B
Centex Development Company (:U33 Holding Corporation,
3333 Development Corporation, Centex Development Company, L.P.)
NOTES TO COMBINING FINANCIAL STATEMENTS
(Continued)
(c) SIGNIFICANT ACCOUNTING POLICIES
REVENUE RECOGNXTXON
Revenue from home building projects and real estate sales are recognized as homes and properties are sold
and title passes.
INVENTORY CAPXTAUZATXON AND COST AUOCATXON
Projects under development and held for sale are stated at the lower of cost (including development costs
and, where appropriate, capitalized interest and real estate taxes) or fair value less cost to sell. capitalized
costs are included in cost of sales in the combining statements of operations as related revenues are
recognized. Interest costs relieved from inventories are included as interest expense. Holding and the
Partnership (collectively the "Companies") review recoverability of their inventories on an individual basis in
accordance with the provisions of Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
EARNXNGS (Loss) PER SHARE/UNXT
Earnings (loss) per share/unit are based on the weighted-average number of outstanding shares of common stock
of 1,000 for Holding and the weighted-average number of outstanding Class A and Class C limited partnership
units of the Partnership of 54,377; 32,281 and 32,260 for fiscal years 1999, 1998 and 1997, respectively.
USE OF ESTXMATES
The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
STATEMENTS OF FXNANCZAL ACCOUNTXNG STANDARDS
Effective April 1998, the Companies adopted Statement of Financial Accounting Standards No. 130, "Report-
ing Comprehensive Income." SF AS No. 130 establishes standards for reporting and displaying comprehensive
income and its components. The Companies have no nonowner changes in equity that would be classified as
"other comprehensive income." As a result, comprehensive income is equal to the Companies' net earnings.
Statement of Financial Accounting Standards No. 131, "Disclosures About Segments of an Enterprise and
Related Information," issued in June 1997, changes the way public companies report information about
segments. The statement, which is based on the management approach to segment reporting, requires com-
panies to report selected quarterly information and entity-wide disclosures about products and services,
major customers, and the material countries in which the entity holds assets and reports revenues. The
Companies adopted this statement effective April 1, 1998. It did not have a material effect on the
Companies' financial statements.
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Centex Development Compony (:J:I33 Holding Corporation,
3333 Development corporotion, Centex Development Company, LP.)
NOTES TO COMBINING FINANCIAL STATEMENTS
(Continued)
statement of Financial Accounting standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities," issued in June 1998, establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts (collectively referred to as derivatives),
and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities
in the statement of financial position and measures those instruments at fair value. The Companies do not
expect the adoption of the statement to have a material impact on the financial statements of the
Companies. The effective date of this statement will be April 2000 for the companies. There is, however, an
exposure draft that would delay the implementation of this standard for the companies until Rpril 2001.
RECLASSIFICATIONS
Certain prior year balances have been reclassified to be consistent with the fiscal 1999 presentation.
COMBINING STATEMENTS OF CASH FLOWS - SUPPLEMENTAL DISCLOSURES
Interest capitalized by the Partnership during the fiscal years ended March 31, 1999, 1998 and 1997 totaled
$1,015,000, $22,000 and $22,000, respectively. Land assets acquired by the Partnership during the fiscal
years ended March 31, 1999 and 1998 in exchange for Class C Partnership units totaled $18,445,000 and
$7,542,000, respectively. In addition, during the fiscal year ended March 31, 1999, the Partnership issued
1,000 new Class C Partnership units for $1 million. No income taxes were paid during the years ended March
31, 1999, 1998 and 1997.
(D) NOTES RECEIVABLE
Development issued common stock to Holding and used the proceeds to advance $7.7 million to a wholly-owned
subsidiary of Centex, as evidenced by a note receivable due Rpril 30, 1999 bearing interest at prime plus
0.875%. During the fiscal year 1999, the note was repaid. Interest income of $116,000, $732,000 and
$713,000 related to this note is included in the accompanying combining financial statements for the years
ended March 31,1999,1998 and 1997, respectively.
Notes Receivable - other at March 31, 1999 and 1998 have stated interest rates ranging up to 10% and are
due in monthly or quarterly installments. Discounts and allowances totaled $21,000 at March 31, 1998. The
weighted average interest rate, inclusive of discounts, was 9% at both March 31, 1999 and 1998. Notes
receivable at March 31, 1999 are collectible over three years, with $23,000 being due within one year. As of
March 31, 1999, all notes were current; however, one loan was in default with respect to development obliga-
tions on the land securing the note. The Partnership is currently working with the lender to cure the default.
The value of the underlying collateral exceeds the note receivable amount at March 31, 1999. Therefore,
should the default under the note agreement not be resolved, management does not anticipate any material
impact to the financial statements.
(E) NOTES PAYABLE
Pursuant to a master note agreement between Holding and Centex, Centex had advanced Holding $1,000,000
at March 31, 1998 secured by a pledge of all of the issued and outstanding shares of Development (the
"Holding Note"). During fiscal 1999 the Holding Note was repaid and the pledge agreement was terminated.
The note bore interest at prime plus 1 %. Interest expense of $62,000, $372,000, and $508,000 related to
this note is included in the accompanying financial statements for the years ended March 31, 1999, 1998 and
1997, respectively.
In addition, Centex Multi-Family Company, a wholly-owned subsidiary of Development, has a note agreement
with Centex (the "MF Note") to fund certain predevelopment costs. The MF Note is unsecured and bears inter-
est at prime, payable quarterly and had an outstanding balance of $582,000 at March 31, 1999.
@
Centex Development Company (3333 Holding Corporation,
3333 Development Corporation, Centex Development Company, L.P.)
NOTES TO COMBINING FINANCIAL STATEMENTS
(Continued)
Non-recourse notes payable, secured solely by the underlying real estate, totaled $10.1 million at March 31,
1999. As land is sold, a portion of the proceeds is restricted for repayment of the notes. In addition, the
Partnership, through wholly-owned single asset entities, had limited-recourse construction debt outstanding
at March 31, 1999 totaling $31.8 million. The Partnership itself has also issued limited guarantees for up to
20% of the commitments. The prime rate in effect was 7.75% at March 31, 1999 and 8.50% at March 31,
1998. The 30-day LIBOR rate at March 31, 1999 and 1998 was 4.94% and 5.70%, respectively. The note bal~
an.ces and rates in effect were as follows (dollars in thousands):
Maturities through March 31,
2004
Total 2000 2001 2002 2003 or later
Non-Recourse Debt
Mortgage note 7.20% $ 1,740 $ 16 $ 17 $ 18 $20 $1,669
Mezzanine note 9.00% 3,921 3,921
Land note 8.00% 3,000 3,000
Land note Prime + 1% 1,431 1,431
10,092 4,447 17 3,939 20 1,669
limited-Recourse Debt
Construction Notes, LIBOR + 1.3% to 2%
31,804
$41,896
25,563
$30,010
5,226
$5,243
1,015
$4,954
$1,669
$20
(F) COMMITMENTS AND CONTINGENCIES
As of March 31, 1999, the Partnership had remaining commitments of approximately $21.7 million on construc-
tion contracts.
To facilitate construction loans obtained by wholly-owned single asset entities, the Partnership has issued
demand notes made payable to the single-asset entities equal to, in some instances, 20% of the construction
loan commitment amount. The single-asset entities have signed these demand notes over to the lender as a
form of additional collateral on the construction loans. The demand notes are payable only in the event of
default on the construction loan. As of March 31, 1999, the Partnership had issued demand notes totaling
$7.2 million.
The single-asset entities have also obtained demand notes from Centex for up to 10% of the construction
loan commitment amount. These demand notes have been signed over to the lenders as additional collateral
on the construction loans, and may be called only in the event of a default on the demand notes issued by
the Partnership.
@
Centex Development company (:s:s:s:s Holding Corporation,
:S:S:S:S Development Corporation, Centex Development Company, L.P.)
NOTES TO COMBINING FINANCIAL STATEMENTS
I (continued)
(G) BUSINESS SEGMENTS
The Partnership operates in four principal business segments - Commercial Development, Multi-Family Develop-
ment, Homebuilding, and Land Sales. These segments operate in the united States and their markets, with the
exception of Homebuilding (which currently operates in New Jersey), are nationwide. The accounting policies
are the same as those described in the summary of significant accounting policies.
Commercial Development actively develops office, industrial, and retail facilities as well as single-family lots.
Commercial Development is developing the buildings primarily for sale. Multi-Family Development develops mid-
market apartment projects and town homes. Multi-Family's strategy is to market the projects for sale prior
to or during construction. The Homebuilding operation involves the development of the Partnership's land and
the purchase of lots together with the construction and sale of single-family homes.
Homebuilding is actively building out the Partnership's land holding in East Windsor, New Jersey as well as pur-
suing "spot lot" development in that general market area. Land Sales is responsible for the property manage-
ment and liquidation of land investments for which no development opportunity has been identified.
During fiscal 1999, the above four named segments evolved as a result of (1) new business initiatives in the
commercial development arena, (2) the commencement of Homebuilding in April 1998, and (3) the management
team structure put in place to conduct the increased development activities. These segments did not exist in
prior years, and therefore the following table sets forth combined financial information relating to these seg-
ments for the fiscal year ended March 31, 1999 (dollars in thousands):
Commercial Multi-Family Land
Development Development Homebuilding Sales Total
Revenues $ 2,616 $ 342 $21,295 $ 4,365 $ 28,618
Cost of Sales (2,077) (17,108) (3,570) (22,755)
Selling, General & Administrative (521) (1,814) (2,544) (554) (5,433)
operating Earnings (Loss) $ 18 $(1,472) $ 1,643 $ 241 $ 430
Identifiable Assets $44,820 $31,337 $10,920 $25,099 $112,176
Capital Expenditures $ $ 91 $ 126 $ $ 217
Depreciation and Amortization $ 41 $ 37 $ 37 $ $ 115
(H) STOCKHOLDERS' EQUITY AND PARTNERS' CAPITAL
E Q U ITY SEe U RITI ES
The Partnership Agreement contemplates the issuance of three classes of limited partnership units, Class A
units, Class B units, and Class C Units. In March 1987, one thousand Class A Units were issued to Centex
subsidiaries in exchange for assets valued at approximately $76 million. The Class B units, held by a nominee
on behalf of the stockholders, will detach and trade separately from Centex stock on the earlier of Payout
(as defined below) or November 30, 2007, the scheduled detachment date. As of February 24, 1998, the
1,000 Class A Units were converted to 32,260 new Class A units.
On Morch 31,1998,7,542 Class C units were issued in exchange for assets with a fair market value of $7.5
million. Under the Partnership Agreement, holders of Class C Units are entitled to substantially the same
rights as holders of Class A Units in connection with matters in common, such as voting, allocations, and dis-
tributions. During fiscal 1999, 19,445 Class C Units were issued in exchange for assets with a fair market
value of $19.4 million.
@
Centex Development Company (:n:n Holding Corporation,
3333 Development Corporation, Centex Development Company, L.P.)
NOTES TO COMBINING FINANCIAL STATEMENTS
(Continued)
PREFERRED RETURN
The Partnership Agreement provides that the Class A and class C limited partners are entitled to a cumulative
preferred return of 9% per annum on the average outstanding balance of their Unrecovered Capital, as
defined. Unrecovered capital represents initial capital contributions as reduced by repayments and is the
basis for preference accruals. In July 1995, in conjunction with the extension of the detachment date, the
limited partner waived preference payments totaling $37.5 million and reduced the Class A Unrecovered Capital
in the Partnership, as defined, to $47.3 million. Distributions made by the Partnership reduced Unrecovered
Capital, as defined, $4.5 million during fiscal 1997 and $10 million during fiscal 1996. During fiscal 1998, the
Partnership made preference payments to its limited partner totaling $4.5 million. No preference payments
were made during fiscal 1999. Preference payments in arrears at March 31, 1999 amounted to $9.1 million and
Unrecovered Capital for Class A and Class C limited partners totaled $32.8 million and $27.0 million, respec-
tively.
ALLOCATION OF PROFITS AND LOSSES
As provided in the Partnership Agreement, prior to Payout (as defined below), net income of the Partnership
is to be allocated to the partners in the following order of priority:
[i] To the Class A and Class C limited partners to the extent of the cumulative preferred return.
[ii] To the partners to the extent and in the same ratio that cumulative net losses were allocated.
[iii] To the partners in accordance with their percentage interests, as defined. Currently, this would be a
combined 20% to the Class A and Class C limited partners and 80% to the general partner.
All loss allocations and allocations of net income after Payout shall be made to the partners in accordance
with their percentage interests, as defined.
DISTRIBUTIONS
Distributions of cash or other property are to be made at the discretion of the general partner and are to be
distributed in the following order of priority:
[i] Prior to the time at which the Class A and Class C limited partners have received aggregate distributions
equal to their original capital contribution ("Payout"), distributions of cash or other property shall be
made as follows:
[a] To the Class A and Class C limited partners with respect to their preferred return, then
[b] To the partners in an amount equal to the maximum marginal corporate tax rate times the amount of
taxable income allocated to the partners, then
[c] To the Class A and Class C limited partners until their Unrecovered Capital is reduced to zero.
[ii] After Payout, distributions of cash shall be made to the partners in accordance with their percentage
interests, as defined.
B
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Centex Development Company (3333 Holding Corporotion,
3333 Development Corporation, Centex Development company, L.P.)
NOTES TO COMBINING FINANCIAL STATEMENTS
(Continued)
WARRANTS
In November 1987, Centex acquired from the partnership 100 warrants to purchase 100 Class B Units in the
portnership at an exercise price of $500 per Class B Unit, and Centex acquired from Holding 100 worrants to
purchase 100 shares of Holding common stock at an exercise price of $800 per share. These warrants are
subject to future adjustment to provide the holders of options to purchase Centex common stock with the
opportunity to acquire Class B Units and shares of Holding. These warrants will generally become exercisable
upon the detachment of the tandem-traded securities from Centex common stock.
(I) RELATED PARTY TRANSACTIONS
SERVICE AND MANAGEIIIENT AGREEIIIENTS
Holding has a service agreement with Centex Service company, a wholly-owned subsidiary of Centex, whereby
Centex service Company provides certain tax, accounting and similar services for Holding at a fee of $2,500
per month. This agreement was amended in fiscal 1999 to include development services and the monthly
fee increased to $30,000. Service fees of $360,000 in fiscal 1999 and $30,000 in fiscal 1998 and 1997 are
reflected as administrative expenses in the accompanying combining financial statements.
The Partnership paid $713,000, $640,000 and $951,000 to Holding during fiscal years 1999, 1998 and 1997,
respectively, pursuant to an agreement whereby Holding provides manogement services to the portnership in
connection with the development and operation of properties acquired by the Partnership, maintenance of
partnership property and accounting and clerical services.
SALES AND PURCHASES
Partnership revenues during fiscal years 1999, 1998 and 1997 include lot sales to Centex Homes of
$3,364,000, $6,494,000 and $3,814,000, respectively. Gains associated with lot soles to Cent ex totaled
$139,000, $906,000 and $538,000 for fiscal years 1999,1998 and 1997, respectively. At March 31,1999,
Centex Homes had contracts to purchase lots for the aggregate price of approximately $6 million to be paid as
lots are delivered.
In January 1998, Development purchased all of the stock of a wholly-owned subsidiary of Real Estate for
$1,134,000.
During fiscal 1999 , the partnership, through its operating subsidiaries, executed contracts with certain of Centex's
construction subsidiaries totaling $43.2 million for the construction of multi-family apartments and an office build-
ing. During fiscal 1999, $19.3 million was paid to centex's construction subsidiaries pursuant to these contracts.
ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE
Included in Accounts Receivoble-Affiliates and Accounts Payable-Affiliates in the accompanying combining
financiol statements ore $7,921,000 at March 31, 1998, which the Partnership advanced to Holding. On
May 19, 1998, the outstanding principal balance on this note was repaid. Interest of $116,000 and $345,000
was accrued on advances during fiscal years 1999 and 1998, respectively. All amounts have been eliminated in
the combined statements.
@
Centex Development Compony (3333 Holding Corporation,
3333 Development Corporation, Centex Development Company, L.P.)
NOTES TO COMB:rN:rNG F:rNANC:rAL STATEMENTS
(Continued)
(J) INCOME TAXES
At March 31, 1999, Holding hod operating loss carryforwards for income tax reporting purposes of $1,582,000.
If unused, the loss carryforwards will expire in fiscal years 2009 through 2020. Holding has not recognized
these tax assets in its balance sheet due to its history of operating losses. Holding joins with its subsidiaries
in filing consolidated income tax returns. The taxable income of the Partnership has been allocated to the
holders of the Class A and Class C Units. Accordingly, no tax provision for Partnership earnings is shown in the
combining financial statements.
(K) SUBSEQUENT EVENTS
On April 15, 1999, Centex Development Company UK Limited ("CDCUK"), a company recently incorporated in
England and Wales and a wholly-owned subsidiary of Centex Development Company, L. P., closed its acquisition
of all of the voting shares of Fairclough Homes Group Limited, a British home builder ("Fairclough"). The seller
of the shares retained non-voting preference shares in Fairclough that will entitle it to receive substantially
all of the net, after tax earnings of Fairclough until March 31, 2001. However, if during that time period the
operating earnings of Fairclough exceed certain levels, then CDCUK will participate in the surplus.
The purchase price at closing (approximately $225 million) was paid by the delivery of two-year non-interest
bearing promissory notes. A major portion of the purchase notes is secured by a letter of credit obtained by
the Partnership from a United Kingdom bank.
During the time period between April 15, 1999 and March 31, 2001, Fairclough will be operated by CDCUK,
subject to certain guidelines that were negotiated with the seller. After March 31, 2001 CDCUK will redeem,
for a nominal value, the preference shares.
This transaction will be accounted for under the purchase method of accounting.
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Centex Development Company (3333 Holding Corporation,
3333 Development Corporation, Centex Development Company, LP.)
QUARTERLY RESULTS (UNAUDITED)
(Dollars in thousands, except per unit/share)
1999
March 31,
1998
1999
1998
1999
1998
3333 Holding corporation
and Subsidiary
combined
centex Development
Company, loP. and subsidiaries
FIRST QUARTER
Revenues
Earnings (LoSS) Before Taxes
Net Earnings (LoSS)
Earnings (Loss) Per unit/shore
Average units outstanding
Average shores outstanding
$6,308 $3,741 $ 6,076 $3,623 $ 476 $ 412
$ (346) $ 791 $ (193) $ 699 $ (153) $ 92
$ (346) $ 791 $ (193) $ 699 $ (153) $ 92
$(3.93) $21.67 $(153) $ 92
49,119 32,260
1,000 1,000
SECOND QUARTER
Revenues
Earnings (LOSS) Before Taxes
Net Earnings (LoSS)
Earnings (LOSS) Per Unit/shore
Average Units outstanding
Average Shares outstanding
$7,772 $3,094 $7,656 $3,002 $ 281 $ 337
$ 375 $ 348 $ 628 $ 360 $(253) $ (12)
$ 375 $ 348 $ 628 $ 360 $(253) $ (12)
$11.79 $11.15 $(253) $ (12)
53,279 32,260
1,000 1,000
THIRD QUARTER
Revenues
Earnings (Loss) Before Taxes
Net Earnings (LOSS)
Earnings (LOSS) Per Unit/Share
Average Units outstanding
Average Shares outstanding
$5,694 $9,228 $5,653 $9,123 $ 194 $ 310
$ 13 $3,034 $ 391 $3,054 $(378) $ (20)
$ 13 $3,034 $ 391 $3,054 $(378) $ (20)
$ 6.99 $94.67 $ (378) $ (20)
55,911 32,260
1,000 1,000
FOURTH QUARTER
Revenues
Earnings (Loss) Before Taxes
Net Earnings (LOSS)
Earnings (Loss) Per Unit/share
Average Units outstanding
Average shares outstanding
$8,844 $4,058 $ 8,843 $3,870 $ 152 $ 446
$ 388 $ 226 $ 989 $ 411 $(601) $(185)
$ 388 $ 226 $ 989 $ 411 $(601) $(185)
$16.69 $12.73 $(601) $(18 5)
59,247 32,286
1,000 1,000
B
Centex Development Company (llll Holding Corporation,
llll Development Corporation, Centex Development Company, L.P.)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FISCAL YEAR 1999 COMPARED TO FISCAL YEAR 1998
On a combined basis, the Companies reported revenues of $28.6 million for fiscal 1999, an increase of 42%
from revenues of $20.1 million in the prior year. Net earnings for fiscal 1999 totaled $430,000 compared to
earnings of $4.4 million in fiscal 1998. The increased revenues primarily resulted from sales of single family
homes from the Partnership's Homebuilding operations reduced by a decrease in land sales relative to 1998.
Net earnings decreased as a result of increased development overhead.
The Companies currently operate in four business segments: Commercial Development, Multi-Family
Development, Homebuilding and Land Sales. R discussion of the results of operations for each
of the segments is presented below.
COMMERCJ:AL DEVELOPMENT
Commercial Development generated $18,000 net earnings in fiscal 1999 compared to break even operations
for the prior year period. Commercial Development revenues for the year totaled $2.6 million from the sale
of industrial land , developed lots, and rental income compared to rental income of $73,000 in the prior
year period.
The first Commercial Development facility, a 38,000 square foot industrial building, was completed in
December 1997. During fiscal 1999, the Partnership began construction on four additional industrial facilities
and one office facility, totaling 634,000 square feet. Completion of each of the projects is scheduled for
early fiscal 2000. Rdditionally, during fiscal 1999, the Partnership developed 16 acres of land into 55 single-
family lots, 15 of which were sold in fiscal 1999.
MULTJ:-FAMJ:LY DEVELOPMENT
Multi-Family Development ("Multi-Family") fiscal 1999 revenues totaled $342,000 compared to $116,000 in
fiscal 1998. Multi-Family reported an operating loss of $1,472,000 for the fiscal year ended March 31, 1999
compared to a loss of $175,000 for the period ended March 31, 1998.
In January 1998, the Companies commenced their Multi-Family operations. The increased loss in fiscal 1999 is
the result of twelve months of operations versus three months in the prior year period. Multi-Family completed
a 304-unit pre-sold apartment community located in The Colony, Texas during fiscal 1999. Rlthough the sale of
this property is scheduled to close during July 1999, the earn-out payment related to the project is not
scheduled to occur for approximately twelve months. Multi-Family also began construction on a 400-unit apart-
ment community located in Grand Prairie, Texas. Project completion is scheduled for late fiscal 2000.
HOMEBUJ:LDJ:NG
The Partnership acquired its New Jersey Homebuilding operations from Centex Homes in Rpril 1998. These
operations delivered 73 homes during fiscal 1999 and generated $21.3 million in revenues and $1.6 million in
operating earnings.
@
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Centex Development Company (3333 Holding Corporation,
3333 Development Corporation, Centex Development Company, L.P.)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
\ (continued)
LAND SALES
Land Sales in fiscal 1999 generated $3.8 million in revenues and contributed $241,000 in net earnings
compared to $19.9 million in revenues and net earnings of $4.6 million in fiscal 1998. Sales of real estate in
fiscal 1999 consisted of 319 lots to Cent ex Homes and two small parcels located in The colony and Bryan Place,
Texas. Prior year sales of real estate included the sale of 138 acres of land zoned multi-family and commercial,
and the sale of 193 residential lots and office and warehouse buildings situated on 17 acres to Centex Homes.
Although the timing of real estate sales is uncertain and can vary significantly from period to period, the
fiscal 1999 reduction in sales is also attributable to the partnership's continued repositioning of the
companies' land assets to consist primarily of land held for current and future development.
FISCAL YEAR 1998 COMPARED TO FISCAL YEAR 1997
On a combined basis, revenues increased to $20.1 million Jor the year ended March 31, 1998 from $9.5 million
reported a year earlier. Fiscal 1998 revenues included the sale of 122 acres of commercial land in The Colony,
Texas, and approximately six acres of commercial and ten acres of multi-family land in Dallas, Texas. sales to
Centex Homes during fiscal 1998 included a property in a north Dallas suburb consisting of one office and five
warehouse buildings situated on approximately 17 acres, and 193 residential lots in New Jersey and Florida.
Revenues of $9.5 millian in fiscal 1997 included the sale of 632 acres of commercial land in The Colony, Texas,
and 153 residential lots to Cent ex Homes.
Net earnings for fiscal 1998 totaled $4.4 million compared to $925,000 for fiscal 1997. The increased earnings
are primarily the result of increased margins on land sales, 28% in 1998 vs. 18% in 1997.
LIQUIDITY AND CAPITAL RESOURCES
During fiscal 1999, 19,445 Class C Units were issued to a Centex affiliate, the Partnership's sole limited part-
ner, in connection with the acquisition of assets valued at $19.4 million. R total of 26,987 Class C units were
Issued during fiscal 1999 and 1998 in connection with the acquisition of assets valued at $27 million. Assets
acquired include the New Jersey Homebuilding operations, land zoned for both commercial and residential uses
and $1.0 million in cash. During fiscal 1998, the partnership made preference payments to its limited partner
totaling $4.5 million. No preference payments were made in fiscal 1999.
The companies actively expanded their development efforts in fiscal 1999 and are funding new development
activities with traditional bank debt on the project level. During fiscal 1999, the Partnership had commit-
ments for $66.9 million in construction debt, of which $35.7 million had been drawn. Terms on the construction
loans range from eighteen to twenty-four months with LIBOR-based interest rates with spreads ranging from
130 to 200 basis points. The Companies believe that the revenues, earnings, and liquidity from the sale of
single-family homes, land sales, and the sale and permanent financing of development projects will be suffi-
cient to provide the necessary funding for its current and future needs.
.
@
Centex Development Company (:J:I:n Holding Corporation,
:I:I:I:I Development Corporation, Centex Development Company, L.P.)
MANAGEMENT'S DJ:SCUSSJ:ON AND ANALYSJ:S OF FJ:NANCJ:AL CONDJ:TJ:ON AND RESULTS OF OPEAATJ:ONS
(Continued)
YEAR 2000 COMPLIANCE
The Companies have a variety of operating systems, computer software applications, computer hardware
equipment, and other equipment with embedded electronic circuits. Pursuant to the services agreement
Holding has with Centex Service Company, Year 2000 compliance issues are being addressed by a Year 2000
Task Force Team comprised of key personnel in the management information systems, legal, internal audit,
and accounting areas of Centex as well as by management of the Companies. since fiscal 1997, the
Companies have been engaged in an ongoing process of identifying, evaluating, and implementing changes
to their systems in order to ensure Year 2000 compliance. As a result of this process, a small number of
systems were identified as being unable to interpret dates after December 31, 1999. In all of the cases,
the replacement or upgrading of the non-compliant systems has already OCcurred as part of their normal
ongoing systems updating.
The Companies have engaged the services of a third-party consulting firm to evaluate their Year 2000 reodiness.
The consulting firm's review was completed during the fourth quarter of fisca/1999. The firm's conclusions
are consistent with the Companies' internal determinations of their Year 2000 readiness. The Companies have
adopted the consulting firm's recommendations for achieving Year 2000 compliance.
Achieving Year 2000 compliance is dependent on many factors, some of which are not completely within the
Companies' control. The Companies obtain information, materials, and services from numerous sources, and
provide goods and services to numerous customers. The failure of these third parties (inclUding u.S., state,
and local governments and agencies) to achieve Year 2000 readiness could adversely affect the Companies'
financial condition and results of operations. In order to address the potential non-compliance by third par-
ties, the Companies will continue to survey their largest customers, contractors, and vendors.
YEAR 2000 FORWARD-LOOKING STATEMENTS
Certain statements in this section, other than historical information, are forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of
1934 and the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertain-
ties relative to the Companies' ability to assess and remediate any Year 2000 compliance issues, the ability
of third parties to correct material non-compliant systems, and the Companies' assessment of the Year 2000
issue's impact on its financial results and operations.
@
I
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Centex Development Compony (:J:J33 Holding Corporotion,
3333 Development Corporation, Centex Development company, L.P.)
MANAGEMENT'S DXSCUSSXON AND ANALYSXS OF FXNANCXAL CONDXTXON AND RESULTS OF OPERATXONS
(Continued)
OTHER DEVELOPMENTS AND OUTLOOK
On April 15, 1999, Centex Development company UK Limited ("CDCUK "), 0 company recently incorporated in
England and Wales and a wholly-owned subsidiary of Centex Development Company, L. P., closed its acquisition
of all of the voting shares of Fairclough Homes Group limited, a British home builder (" Fairclough"). The seller
of the shares retained non-voting preference shares in Fairclough that will entitle it to receive substantially
all of the net, after tax earnings of Fairclough until March 31, 2001. However, if during that time period the
operating earnings of Fairclough exceed certain levels, then CDCUK will participate in the surplus.
The purchase price at closing (approximately $225 million) was paid by the delivery of two-year non-interest
bearing promissory notes. A major portion of the purchase notes is secured by a letter of credit obtained by
the Partnership from a United Kingdom bank.
During the time period between April 15, 1999 and March 31, 2001 Fairclough will be operated by CDCUK,
subject to certain guidelines that were negotiated with the seller. After March 31, 2001 CDCUK will redeem,
for a nominal value, the preference shares.
This transaction will be accounted for under the purchase method of accounting.
FORWARD-LOOKING STATEMENTS
The Management's Discussion and Analysis of Financial Condition and Results of operations and other sections
of this Annual Report contain forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, section 21E of the Securities Exchange Act of 1934 and the Private Securities litigation Reform
Act of 1995. Forward-looking statements may be identified by the context of the statement and generally
arise when the Companies are discussing their beliefs, estimates or expectations. These statements are not
guarantees of future performance and involve a number of risks and uncertainties. Actual results and out-
comes may differ materially from what is expressed or forecast in such forward-looking statements. The princi-
pal risks and uncertainties that may affect the Companies' actual performance and results of operations
include the following: general economic conditions and interest rates; the cyclical and seasonal nature of the
Companies' businesses; changes in property taxes; changes in federal income tox laws; governmental regula-
tion; changes in governmental and public policy; changes in economic conditions specific to anyone or more of
the company's markets and businesses; competition; availability of raw materials; and unexpected operations
difficulties. Other risks and uncertainties may also affect the outcome of the componies' actual performance
and results of operations.
@
Centex Corporation and Subsidiaries
BOARD OF DIRECTORS
Alan B. Coleman (3,')
Former President
Southwestern Graduate
school of Banking Foundotion
southern Methodist University
Dan W. Cook III ,,)
Former General Partner
Goldman, Sachs /: Co,
Juan l. Elek (.)
Co-Chairman
Elek, Moreno Valle y Asociados
Laurence E. Hirsch (I)
Choirman and
Chief Executive Officer
C. W. Murchison, III (',3)
Private Real Estate Oevelapment
and Other Investments
Charles H. Pistor (,~.)
Retired Vice Chair
Southern Methodist University
David W. Quinn (,)
Vice Chairman and
Chief Financial Officer
Paul R. Seegers (l~'*)
President, Seegers Enterprises
Paul T. Stoffel (',3*)
Chairman, Paul Stoffel
Capitol Corporation
(Numbers in parentheses
indicate Board Committees)
(1) Executive Committee
(2) Compensation and
Stock Option Committee
(3) Audit Committee
(4) Oirector Nominating
Committee
* Chairman
OFFICERS
Laurence E. Hirsch
Chairman and
Chief Executive Officer
David W. Quinn
Vice Chairman and
Chief Financial Officer
Timothy R. Eller
Executive Vice President
Raymond G. Smerge
Executive Vice President,
Chief Legal Officer,
General Counsel and Secretary
Michael S. Albright
Senior Vice President
Lawrence Angelilli
Senior Vice President
Robert M. Swartz
Senior Vice President
Sheila E. Gallagher
vice President
Richard C. Harvey
vice President
Peter M. McParlin
Vice President
Vicki A. Roberts
Vice President and Treasurer
Barry G. Wilson
Controller
CENTEX HOMES
Timothy R. Eller
Chairman and
Chief Executive Officer
Andrew J. Hannigan
President and
Chief Operating Officer
William D. Albers
Executive Vice President and
Chief Financial Officer
David J. Sasina
Senior vice President
Jonathan R. Wheeler
Senior Vice President
Brian J. Woram
Senior Vice President
and General Counsel
OPERATING DIVISIONS
Jay l. Smith
Executive Vice President,
Northwest Region
WASHINGTON STATE
Kenneth N. Krueger
President
PORTLAND, OR
Steven l. Puis
President
NEVADA
John D. Michell
President
Steven R. Muller
Executive Vice President,
West Coast Region
NORTHERN CALIFORNIA
David l. Barclay
President
SACRAMENTO, CA
Jack E. Hood
President
CENTRAL VALLEY, CA
David C. Hatch
President
LOS ANGELES/VENTURA, CA
James J. Kopel, Jr.
President
INLANO EMPIRE, CA
David l. Hahn
President
SOUTH COAST, CA
Roland S. Osgood
President
SAN DIEGO, CA
Douglas R. Jaeger
President
Richard l. Sconyers
Executive Vice President,
southwest Region
PHOENIX, AI
Michael D. Trailor
President
NEW MEXICO
Thomas A. Houser
President
CENTRAL TEXAS
Thomas E. Lynch
President
Killeen, TX
Thomas A. Harper
Manager
SAN ANTONIO, TX
J. Damon Lyles
President
HOUSTON, TX
A. Wayne Culpepper
President
Philip W. Warnick
Senior vice President,
Dallas/Fort Worth Region
DALLAS/FORT WORTH, TX
NORTH
Benton H. Karnes
President
DALLAS/FORT WORTH, TX
SOUTH
David M. Christian
President
DALLAS/FORT WORTH, TX
FOX & JACOBS
W. Lee Thompson
President
Thomas M. Boyce
Executive Vice President,
Midwest Region
COLORADO
Mark l. Krivel
President
MINNESOTA
Scott J. Richter
President
ILLINOIS
Daniell. Star
President
INDIANAPOLIS, IN
Timothy K. McMahon
President
COLUMBUS, OH
Joseph H. Mathias
President
Robert D. Hillmann
Executive Vice President,
Mid Atlantic Region
HAMPTON ROADS, VA
Jode l. Kirk
President
WASHINGTON, D,C. METRO
Robert K. Davis
President
NASHVILLE, TN
Kirk D. Rutter
President
CHARLOTTE, NC
Mikell A. McElroy
President
RALEIGH/DURHAM, NC
E. Scott Batchelor
President
COASTAL CAROLINA
John D. Carpenter
President
Charleston, SC
James E. Thrower
Manager
Hilton Head, SC
Frederick J. Bricketto
Manager
Myrtle Beach, SC
W. Hampton pitts
Manager
(0
.
.
.
Centex Corporotion and subsidiaries
ax MORTGAGE COMPANY
John L. Matthews
Chairman and
chief Executive Officer
CRLTON HOMES
(NEW JERSEY)
Bradley R. Little
President
TERL HOMES
(RICHMOND, VA)
Thomas B. Teal
President
Joel H. Sowers
Executive vice President,
southeast Region
COLUMBIA, SC
W. Michael Satterfield
President
GREENVILLE, SC
D. Keith Wood
President
William R. Shean
President
NORTH FLORIDA
Douglas W. Smith
President
Palm Coast, FL
John Lenihan
Manoger
ORLRNDO, FL - NORTH
Gregory L. LePera
President
ORLANDO, FL - SOUTH
Patrick J. Knight
President
TRMPR, FL
Gary L. Jernigan
President
BRRDENTON/
SRRRSOTR, FL
Michael J. Belmont
President
NRPLES/FORT MYERS, FL
Timothy J. Ruemler
President
SOUTH ERST FLORIDR
W. Trent Bass
President
WRYNE HOMES (OHIO)
David M. showers
Chief Executive Officer
CTX Builders Supply
John C. Mikkelson
President
@
CENTEX HOMES INTERNATIONAL
Stewart A. Baseley
Chairman ond
Chief Executive Officer
Paul M. Bak
Managing Director
CENTEX LATIN AMERICA, INC.
Gilberto Riojas
President and
Chief Executive Officer
CAVCO INDUSTRIES, LLC
AI Ghelfi
Chairmon
Brent Ghelfi
President and
Chief Executive Officer
Dave Blank
vice President
Sean Nolen
vice President and
Chief Financial Officer
Sam Parlette
vice President
CENTEX COMMUNITY
DEVELOPMENT
Roger D. Sefzik
President and
chief Executive Officer
Timothy C. ziifle
Division President
CENTEX HOMETEAM SERVICES
Stephen M. Weinberg
Chairman and
Chief Executive Officer
A. Don Knudsen
Executive vice President and
Chief Operating Officer
G. Gaylon Hull
vice President and
Chief Financial officer
David J. Tarman
vice President
Centex HomeTeom
Lawn Core
David H. Armitage
President
Centex HomeTeom
Pest Control
Robert J. Wanzer
President
Centex HomeTeom
Security
Keith P. Young
President
Mitchell W. Carter
Executive Vice President and
Chief Operating officer
KENSINGTON COTIAGES
BY CENTEX
Not S. Leakey
vice President
CENTEX DEVELOPMENT
COMPANY
Richard C. Decker
President and
Chief Executive Officer
F. Charles Emery II
Executive Vice President and
Chief Operating Officer
David A. Greenblatt
vice President and
General Counsel
CENTEX MULTI-FAMILY
COMPANY
Michael M. Vick
President
Kyle D. Lovelady
vice President
CENTEX FINANCIAL
SERVICES GROUP
James R. Hillsman
Executive vice President and
Chief Financial Officer
James H. Graass
Senior vice President and
General Counsel
Thomas E. Tuohy
Senior Vice President
Kenneth W. Blackburn
vice President and controller
Steven B. Chiou
vice President
Gloria D. Fillmon
vice President
Timothy M. Bartosh
President and
Chief operating Officer
Rick J. Carothers
Executive Vice President
David F. Robinson
Executive Vice President
Steven L. Deardorff
senior Vice President
Debra R. Dunn
Senior vice President
Teresa G. Baldwin
vice President
Debbie K. catka
Vice President
Leland C. Stevens
vice President
Butch stine
vice President
Carter H. Ward
Vice President
Ronald J. Rgasar
Regional Vice President
Ross T. Anderson
Regional Vice President
Mary C. Callegari
Regional Vice President
Daniel B. Deaton
Regional Vice President
Paul V. Diamond
Regional Vice President
Gary F. Gould
Regional Vice President
Rndrew A. Warrick
Regional Vice President
CENTEX HOME EQUITY
CORPORATION
Anthony H. Barone
President and
Chief Executive Officer
stephen D. Janawsky
Executive vice President and
Chief operating Officer
John R. Griggs
Executive vice President
Centex Corporation and subsidiories
Melvin H. siemer, Jr.
Executive vice President
AI E. Broadway
Senior vice President
Gary J. DeLembo
senior vice President
Anne E. Duffield
Senior vice President and
General Counsel
F. Dana Ferris
Senior Vice President
Andrew Wells Finn
Senior Vice President
Edward J. Gallagher, Jr.
Senior Vice President
Steven L. Hess
Senior Vice President
David P. Kennedy
Senior vice President
steven H. Lewis
Senior Vice President
steven L. Mix
Senior Vice President
Robert S. Smith
Senior vice President
Michael L. Talkington
Senior Vice President
David E. White
Senior Vice President
CENTEX FINANCE COMPANY
Thomas M. Cox
Executive Vice President
Mick M. McGlothlen
vice President
Thomas E. Hermann, III
Vice President
CENTEX TITLE AND
INSURANCE OPERATIONS
Karren P. Bates
President
Randall P. Hood
Vice President
Monte R. Sturgeon
Vice President
Commerce Land Title, Inc.
Gregory M. Lyssy
Executive Vice President
Metropolitan Title &
Guaranty Company
Rebecca R. winters
Executive Vice President
Westwood Insurance
John J. Flynn
President and
Chief Executive Officer
CENTEX TECHNOLOGY, INC.
Thomas G. Apel
Chairman
Mark L. Meyer
President
CENTEX CONSTRUCTION
PRODUCTS, INC.
O.G. Dagnan
Chairman and
Chief Executive Officer
Richard D. Jones, Jr.
President and
Chief Operating Officer
H.D. House
Executive Vice president-
Gypsum
steven R. Rowley
Executive Vice president-
Cement
Arthur R. Zunker, Jr.
Senior Vice President,
Treasurer and
Chief Financial Officer
CENTEX CONSTRUCTION
GROUP, INC.
Brice E. Hill
President and
Chief Executive Officer
Kenneth R. Bailey
Executive Vice President and
Chief Operating Officer
Christopher D. Genry
Senior Vice President,
Chief Financial Officer
and Treasurer
Glenn S. Burns
Vice President and
Chief Legal Officer
cindy L. DePrater
Vice President
Mark W. Layman
Vice President
Jeffery A. Neyland
Vice President and
Chief Information Officer
L. Donald Sumrell
Vice President
Centex Construction
Company, Inc.
DALLAS DIVISION
Robert C. Van Cleave
President and
Chief Executive Officer
WASHINGTON, D.C.
DIVISION
John P. Tarpey, Jr.
President and
Chief Operating Officer
Centex Forcum
Lannom, Inc.
David R. Taylor
President and
Chief Executive Officer
Centex Landis Construction
Company, Inc.
James C. Landis
President and
Chief Executive Officer
Centex Rodgers
Construction Company
Edward A. whitley
Chairman and
Chief Executive Officer
Douglas H. Jones
President
Centex Rooney
Construction
Company, Inc.
Bob L. Moss
Chairman, President and
Chief Executive Officer
3333 HOLDING
CORPORATION AND
SUBSIDIARY AND
CENTEX DEVELOPMENT
COMPANY, L.P.
BOARD OF DIRECTORS
Richard C. Decker
Chairman. President and
Chief Executive Officer
Josiah O. Low, III
Managing Director
Donaldson. Lufkin /; Jenrette
Securities Corporation
David M. Sherer
President
David M. Sherer and
Associates
@
MAILING ADDR.ESS
P.O. Box 199000
Dallas, TX 75219-9000
CORPORATE HEADQUARTERS
2728 North Harwood
Dallas, TX 75201-1516
(214) 981-5000
TRANSFER AGENT AND REGISTRAR
ChaseMellon Shareholder Services
85 Challenger Road
Overpeck Center
Ridgefield Park, NJ 07660
1-800..635-9270 (toll-free)
STOCK LISTINGS
New York stock Exchange
The International stock Exchange (London)
Ticker Symbol: .. CTX"
ANNUAL MEETING
The Annual Meeting of stockholclets of
Centex Corporation and 3333 Holding Corporation
will be held on July 22, 1999 at 10:00 a.m. in
the auditorium of the Dallas Museum of Art,
1717 North Harwood, Dallas, Texas.
STOCKHOLDER INQUIRIES
Communications concerning transfer
requirements, lost certificates. dividends or
change of address should be sent to Chase Mellon
Shareholder Services at the address above.
FORM ~O-K
A copy of the Annual Report on Form 10-K
of Centex Corporation, 3333 Holding Corporation
and Centex Development Company, L.P. is
available upon request to the corporate secretary
at corporate headquarters.
WEB SITE
Visit us at <http://www.centex.com>
., _ \ ~c;_ -' G
Home Building
Conventional Homes
CENTEX HOMES builds and sells homes in 64 markets in 19 states and Washington, D.C. In fiscal
1999, these homes ranged in price from $54,000 to $1.1 million, with an average price of
$185,700. Affordable entry-level home initiatives are underway in about 80% of its markets,
many under the name of FOX & JACOBS HOMES. WAYNE HOMES builds about 600 homes annually on
buyer-owned land throughout Ohio. *' During fiscal 1999, CENTEX lATIN AMERICA, INC. was
formed to pursue investments in latin American markets. Centex already participates in a
high-end housing joint-venture, la loma, in Mexico City. *' Shortly after fiscal year end, a
Centex affiliate acquired a significant U.K. home builder, london-based Fairclough Homes.
@ Headquarters
. 64 U. S. Markets
49 Operating Divisions
and Satellites
299 Neighborhoods
[.1 Wayne Homes
Markets
· La Lama
Revenues
99 ..
~
<--
-"---'/~---",_r-
($ in millions)
Operating Earnings
98
141 $2,312
9 $2,819
99
97
96
95
$2,998
~
~
10.3 $242.2
. $252.5
$2,453
($ in millions)
98
8.8 $170.5
$179.3
$2,300
97
$1,990
96
$2,111
95
. Conventional Homes
. Manufactured Homes (Centex acquired 80%
of Cavcc Industries in March 1997.)
. Centex Homes
. Manufactured Homes
$144.0
$106.7
$112.1
o
Centex Homes
Year Ended March 31,
1998
100.00/0 $ 2,312.0 100.0%
(77.8%) (1,839.8) (79.6%)
(13.6%) (301.7) (13.0%)
8.60/0 $ 170.5 7.4%
12,418
$ 183,321
6.4%
$ 13,733
25.0%
($ in mil/ions, except per unit data)
1999
conventional Homes Revenues
Cost of Sales
Selling, General & Administrative
$ 2,819.4
(2,194.7)
(382.5)
Operating Earnings/Margin
$
242.2
units Closed
14,792
Average Unit Sales Price
% Change
$ 185,668
1. 30/0
operating Earnings per unit
% Change
$ 16,375
19.20/0
Closings 1999 1998 Change
West 3,060 2,964 3%
Midwest 2,062 1,147 80%
East 3,309 2,650 25%
Southeast 2,582 2,400 80/0
southwest 3,779 3,257 16%
14,792 12,418 19%
Soles (Orders) Backlog 1999 1998 Change
West 921 991 (7%)
Midwest 1,355 433 213%
East 1,392 963 45%
southeast 1,500 1,136 32%
southwest 1,624 1,393 17%
6,792 4,916 38%
Soles (Orders) 1999 1998 Change
West 2,990 2,987 -0/0
Midwest 2,515 1,139 121%
East 3,466 2,752 26%
southeast 2,950 2,617 13%
southwest 4,010 3,531 14%
15,931 13,026 22%
0
Manufactured Homes
CAVCO INDUSTRIES is the largest manufactured home builder in Arizona and New Mexico and
currently ranks fifteenth in the United States. Cavco is also the nation's largest producer of
400-square-foot "park model" homes used in recreational vehicle parks. The company oper-
ates five manufacturing plants: three in Arizona, one in New Mexico and one in Texas. Cavco
sells its homes through 22 company-owned retail outlets and a network of approximately 350
independent dealers. .. CENTEX COMMUNITY DEVELOPMENT opened its first manufactured home
"for sale" neighborhood near Albuquerque, New Mexico in late fiscal 1999.
@ Headquarters
. Manufactured
Housing plants
. Cavco Retail Group
. Centex Community
Development
o Market Area
Cavco Industries ($ in millions) Year Ended March :Jl,
1999 1998
Revenues - Construction $ 137.7 100.00/0 $ 140.6 100.0%
Cost of sales (107.9) (78.3%) (113.7) (80.9%)
Selling, General & Administrative (13.9) (10.1%) (1 3. 2) (9.4%)
$ 15.9 11.60/0 $ 13.7 9.7%
Retail Sales Operations $ 40.9 100.00/0 $ -0/0
Cost of Sales (30.4) (74.5%) - 0/0
Selling, General & Administrotive (10.3) (25.3%) -%
$ 0.2 0.20/0 $ -%
Construction and Retail Earnings $ 16.1 $ 13.7
Goodwill Amortization (3.3) (2.3)
Minority Interest Expense (2.5) (2.7)
Group Operating Earnings $ 10.3 $ 8.7
units
units Produced 6,275 5,751
units Sold - Retail 976
Less: Intersegment Sales (811)
units Sold 6,440 5,751
0
Home Services
CENTEX HOMETEAM SERVICES provides electronic Security, Pest Control and Lawn Care services
to approximately 125,000 customers. CENTEX HOMETEAM SECURITY has installed 14,000
single-family security systems, mostly for Centex-built homes, and provides centralized
alarm monitoring services for 67,000 customers. CENTEX HOMETEAM PEST CONTROL, which cur-
rently has about 58,000 customers, offers conventional pest control services and termite
treatment as well as the patented Cent ex Pest Defense System@ "Tubes in the Wall," which
is installed during home construction. CENTEX HOMETEAM LAWN CARE, formed in fiscal 1999,
provides a variety of lawn protection services, including balanced fertilization, core aera-
tion, and weed, insect and disease control treatments.
@ Headquarters
Markets
senior services
KENSINGTON COTTAGES BY CENTEX addresses the need for care-based housing for the aging
population. The 28-bed assisted living facilities provide specialized personal care services in
a secure environment for people with Alzheimer's disease and related memory impairments.
Centex owns and operates Kensington Cottages in Round Rock (near Austin) and in League
City (near Houston), Texas and is currently building a third facility in Amarillo, Texas.
@ Headquarters
. Completed Facility
. Facility Under
Constructian
o
Investment Real Estate
All of Centex's investment property transactions are reported through its INVESTMENT REAL
ESTATE GROUP. The Group is involved in the acquisition, development and sale of land, and
the development of industrial, retail and office projects, and multi-family complexes.
'" The Group's land portfolio, which has a significant value, is being carried at a nominal
"book basis." As these properties are developed or sold, the net sales proceeds are
reported as operating margin. In addition, Negative Goodwill attributable to the Group is
being amortized to earnings over approximately seven years ($16 million annually). '" In
addition to results from its development activities, the Group's operating earnings include
centex's equity in the operating earnings of CENTEX DEVELOPMENT COMPANY, L.P. '" Shortly
after the end of fiscal 1999, CENTEX DEVELOPMENT COMPANY UK LIMITED acquired a significant
home builder in the United Kingdom, London-based Fairclough Homes, which builds approxi-
mately 1,700 homes per year (about 1% of the U.K. market).
@ Headquarters
. Commercial Projects
. Multi-Family Projects
OLand
Fairclough Homes - England
@ Headquarters
. Divisions
Operating Earnings
($ in millions)
99
$29.4
98
$28.2
97
$17.9
~\
8
Financial Services
CENTEX FINANCIAL SERVICES GROUP provides a variety of mortgage, title and insurance prod-
ucts and services to both Centex and non-Centex home buyers. '" CTX MORTGAGE COMPANY
(CTX) ranks among the nation's largest non-bonk-affiliated mortgage originators. In fiscal
1999, CTX provided loans for about 67% of Centex Homes' customers. However, these
"builder" loans accounted for just 13% of CTX's total volume, with the remoining 87% rep-
resenting "retail" (third-party) mortgages. '" Title insurance policies are offered by
COMMERCE LAND TITLE in Texas and by METROPOLITAN TITLE AND GUARANTY COMPANY in Florida,
Virginia and Maryland. WESTWOOD INSURANCE issues homeowners, auto, boat, life, earth-
quake, flood, commercial and umbrella insurance policies for customers of Centex and more
than 100 other clients. '" CENTEX TECHNOLOGY provides services to the mortgage industry
through three subsidiaries: ADFITECH specializes in quality control services; LPT offers
automated mortgage processing systems; and ADFINET utilizes CD-ROM technology to auto-
mate FNMA regulations for industry use.
@ Headquarters
CTX Martgage Campany
. Title & Insurance
Operations
. Centex Technology
Revenues ($ in millions) Operating Earnings ($ in millions)
99 $436 99 $92.3
98 $246 98 $31.4
97 $169 97 $24.4
96 $130 96 .. $17.2
95 - $107 95 . $9.4
o
Financial Services (continued)
CENTEX HOME EQUITY CORPORATION (CHEC) provides home equity loans and sub-prime mortgages,
generally mortgage refinancings for purposes of debt consolidation or home improvements.
Approximately 85% of CHEC's originations represent first lien loans. CHEC offers its loans
both directly to borrowers through its retail branch system and indirectly through its
mortgage broker-referral network. CHEC currently has a total of 124 offices. '" CENTEX
FINANCE COMPANY provides financing to buyers of manufactured homes, both through Cavco
Retail Group and other selected independent dealers.
@ Headquarters
. CHEC Retail Offices
. CHEC Broker Offices
o Centex Finance
Company
CTX Mortgage Company
Year Ended March 31,
1999 1998 Change
Originations
Builder 9,882 8,748 13%
Retail 66,496 44,096 51%
Total 76,378 52,844 45%
Applications
Builder 10,937 9,357 17%
Retail 67,189 49,478 36%
Total 78,126 58,835 33%
Loan Volume $ 10.06 $ 6.69 50%
(in billions)
Centex Home Equity Corporation
Year Ended March 31.,
1999 1998 Change
Originations 15,582 7,982 95%
Applications 82,803 27,955 196%
Loan Volume $ 1.02 $ 0.49 106%
(in billions)
Average Loon Size $ 65,200 $62,000 5%
Profit per Loon $ 620 $
Centex Finance Company
Year Ended March 31,
Average Loon Size $131,700 $126,500 4%
Profit per Loon
1999 1998 Change
Originations 818 23
Loon Volume $ 0.04 $
(in billions)
Average Loon Size $ 43,800 $36,700 19%
8
$ 1,118 $
748
49%
Construction
Products
CENTEX CONSTRUCTION PRODUCTS, INC. (CXP) manufactures, produces, sells and distributes
building materials used to construct the nation's homes, commercial and industrial build-
ings, and infrastructure projects: Cement, Gypsum Wallboard, and Readymix Concrete and
Aggregates. .. In 1994, CXP, formerly a wholly owned subsidiary of Centex Corporation,
completed an initial public offering of 51% of its stock and began trading on the New York
stock Exchange. As a result of CXP's repurchases of its own stock since becoming publicly
held, Centex's ownership interest in CXP is currently about 61%.
@ Headquarters
. Cement plant
. Cement Terminal
. Wallboard plant
'" Reload/Distribution
Yard
0. Concrete Operation
. Aggregates Operation
Revenues
99
98
97
96
95
($ in millions)
Operating Earnings
($ in millions)
$336
$69.2
$121.1
99
$297
$47 7
$88.3
98
$239
-.,...-
$64.4
97
$223
..1>.&.....
$52.3
96
$194
_$1L
$33.8
95
exp's results were consolidated in Centex's
finoncials in fiscal 1997 when Centex's
ownership exceeded 50%.
. Centex's ownership share.
o
Construction Products (continued)
Supplemental Construction Products Data
(volumes in thousands,
except Gypsum wallboard)
Year Ended March 31,
Cement
Sales Volumes (Tons)
Averoge Net Sales Price
1999 1998 Change
2,218 2,153 3%
$ 68.75 $ 65.19 5%
1,155 1,089 6%
$122.55 $109.01 12%
Gypsum Wallboard
Sales Volumes (MMSF)
Average Net Sales Price
Concrete
sales volumes (Cubic yards) 706 672 5%
Average Net Sales Price $ 49.78 $ 47.33 5%
Aggregates
Sales Volumes (Tons) 2,916 2,592 13%
Average Net Sales Price $ 4.02 $ 3.93 2%
Contracting and
Construction Services
The CENTEX CONSTRUCTION GROUP (CCG), which has completed over $21 billion of projects,
including some of the better-known structures in the U.S., consistently ranks among the
nation's largest general building contractors. As general contractor or construction manag-
er, CCG supervises and coordinates the building of its projects. Although CCG also may self-
perform some of the actual construction, the company generally hires subcontractors to
perform the majority of the work.
f!l Headquarters
* Centex Construction
-k. Centex Rooney
*. Centex Rodgers
*. Centex Forcum \.
Lannom
* Centex Landis
D Current Construction ~-
@
Contracting and Construction Services (continued)
Although CCG competes in both the negotiated and hard-bid markets, approximately 90%
of CCG's current contracts are higher-margin private negotiated projects. CCG projects
include hospitals, hotels, office buildings, correctional facilities, apartments, shopping
centers, airports, parking garages, educational buildings, military facilities, post
offices, sports facilities, and convention and performing arts centers. " CCG subsidiaries,
which are based in Florida, Texas, Tennessee, Washington, D.C. and Louisiana, perform
contract work nationwide.
Revenues
99
98
97
96
95
($ in mil/ions)
Economic Earnings
($ in mil/ions)
$1,351
$3.0
99
$22.4
$954
98
$12.4
$1,068
97
$3.1
$984
96
($.1)
$1,060
95
~ Operating Earnings (Losses)
. Investment earnings on cash flow over equity
(eliminated in consolidation)
Revenues by Type of Project - Fiscal 1999
office
Healthcare
correctional
Hospitality
Education
Government
I ndu strial/Manufacturing
Multi-Family
Retail
Entertainment
Sports
Transpartatian
@
27%
_4%
_4%
.2%
.2%
11%
Contracting and Construction Services (continued)
selected New Contracts - Fiscal 1999
$ 63.6 M
$ 50.0 M
$ 43.1 M
$ 39.7 M
$ 37.8 M
$ 37.0 M
$ 34.0 M
$ 33.0 M
$ 31.8 M
$ 30.2 M
$ 27.2 M
$ 23.7 M
$ 22.0 M
$ 20.0 M
$ 20.0 M
$ 17.2 M
$ 17.2 M
$ 16.2 M
$ 15.0 M
$ 14.5 M
$ 14.2 M
$ 13.5 M
$ 13.5 M
$ 13.0 M
$ 13.0 M
$ 12.1 M
$ 12.0 M
$ 11.6 M
$ 10.5 M
$ 10.3 M
$ 10.2 M
$ 6.8 M
$ 4.6 M
Galleria North-Towers I and I!
Osceola County Courthouse
Plaza of the Americas
Centura Office Building
Boynton Beach High School
One Freedom Square Office Building
Ortiz Correctional Facilities
Marriott Orlando World Center Expansion
Flagler Hospital-Phases I! and II!
One International place
100 Navarre Place
International Center IV
Lincoln Park at Northpark
Mayo Clinic Women's Center
Bass Pro Shops Outdoor World
Maury Regional Hospital-West Tower
The Domaine Apartments
Sheffield Apartments
Bass Pro shops Outdoor World
Seminole County Community College
Bay Point Schools-Additions and Renovations
Narcoossee K-8 School
Poinciana K-8 School
Millsaps College-Campus Improvements
Ritz-Carlton Hotel
ARI Industries Tank Car Facility
Electa Lee Middle School
Chelsea Retirement Community
Children's Medical Center Office Building
University of Florida-Campus Parking Garages
McRae Correctional Facility
Dillard university-Williams Hall and Kearney Hall
Girod Street Apartments
Dallas, TX
Kissimmee, FL
Reston, VA
Dallas, TX
Boynton Beach, FL
Reston, VA
Fort Myers, FL
Orlando, FL
st. Augustine, FL
Dallas, TX
South Bend, IN
Dallas, TX
Dallas, TX
Jacksonville, FL
Grapevine, TX
Columbia, TN
Piano, TX
Grand Prairie, TX
Concord, NC
Orlando, FL
st. Petersburg, FL
st. Cloud, FL
orlando, FL
Jackson, MS
Naples, FL
paragould, AR
Fort Myers, FL
Chelsea, MI
Dallas, TX
Gainesville, FL
McRae, GA
New Orleans, LA
New Orleans, LA
Supplemental Contracting and Construction Services Data
(volumes in millions)
New contracts
Backlog at March 31
Year Ended March 31,
1999 1998 Change
$ 1,128
$ 999
13%
$ 937
$1,160
(19%)
@