CENTEX CORP SHARES OF COM STK US$0.25 
By Highlights of the quarter ended
-- Loss from continuing operations of $5.34 per diluted share
-- Generated positive cash flow from homebuilding operations
-- Dec. 31 cash balance of $1.47 billion, up from $62 million
-- Reduced homebuilding SG&A expenses by 56% or $142 million
-- Reduced owned lot position by 32% to 59,163 lots
"Although the declining economy caused unprecedented buyer hesitancy early in the quarter, we successfully adjusted to the difficult sales environment and made progress on key initiatives," said
Corporate Results
Fiscal third-quarter revenues were
"I am pleased that combined corporate and homebuilding SG&A was down 48% from last year's third quarter. We are accelerating our overhead and headcount adjustments to align with the current sales environment. Overhead costs will continue to come down," Mr. Eller said.
HomeBuilding
Fiscal third-quarter revenues were
Housing operating losses (housing revenues less housing cost of sales and SG&A) were
Financial Services
Financial Services reported an operating loss of
Other
During the fiscal third quarter, the Company increased its valuation allowance related to its deferred tax assets by
Non-GAAP Financial Measures
Explanations of non-GAAP financial measures used in this press release and the accompanying attachments, and reconciliations of the non-GAAP financial measures to the comparable GAAP financial measures, are given in the applicable attachments.
Centex senior management will host a conference call to discuss the third-quarter financial results at
Forward-Looking Statements
Some of the statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by the fact that they relate only to anticipated or expected events, activities, trends or results, which are inherently subject to risks, uncertainties and other factors. Actual results and outcomes may differ materially from what is expressed or forecast in such statements. Forward-looking statements included in this press release are made as of its date. We do not undertake any obligation to update or revise any forward-looking statement.
Important risks and other factors include, but are not limited to: (1) the effects of recent disruptions in the global credit and securities markets, which have adversely impacted the banking and mortgage finance industries, resulting in tightening of credit and reductions in liquidity; (2) recent adverse changes in national and regional economic and business conditions, including employment levels; (3) the effects of the current downturn in the homebuilding industry, including potential adverse market conditions and foreclosures that could result in reduced sales and closings and additional inventory or other impairments; (4) customer cancellations and consumer homebuyer sentiment; (5) competition; (6) price changes in raw materials or other components of our houses; (7) the availability of adequate sources of financing to continue to implement our business strategy; (8) our ability to generate cash from sales of assets and other sources that supplement our existing cash resources; and (9) the potential loss of tax benefits if we have an "ownership change" under IRC Section 382. These and other risks and uncertainties are described in greater detail in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended
Note Attachments:
(1) Revenues and Earnings by Lines of Business
(2) Condensed Consolidated Balance Sheet
(3) Home Building Segment Data
(4) Supplemental Home Building Data (non-GAAP reconciliation)
Attachment 1
Centex Corporation and Subsidiaries
Revenues and Earnings by Lines of Business
(Dollars in thousands, except per share data)
Quarter Ended Nine Months Ended
December 31, December 31,
(unaudited) (unaudited)
----------- -----------
2008 2007 (C) Change 2008 2007 (C) Change
---- -------- ------ ---- -------- ------
Revenues
Home
Building
(A) $843,156 $1,811,084 (53%) $2,845,451 $5,720,388 (50%)
Financial
Services 29,032 62,203 (53%) 157,864 240,869 (34%)
------ ------ ------- -------
Total $872,188 $1,873,287 (53%) $3,003,315 $5,961,257 (50%)
======== ========== ========== ==========
Operating
Earnings
(Loss)
Home
Building
(A) $(595,046) $(625,265) $(840,913) $(1,749,737)
Financial
Services (14,329) (60,484) (52,420) (99,597)
Other 6,953 1,445 19,346 24,493
----- ----- ------ ------
Total
Operating
Earnings
(Loss) (602,422) (684,304) (873,987) (1,824,841)
Corporate
General
and
Admini-
strative
Expenses (40,683) (37,850) (152,757) (117,371)
Interest
Expense (17,758) - (28,911) -
------- --- ------- ---
Loss from
Continuing
Operations
Before Income
Taxes (660,863) (722,154) (1,055,655) (1,942,212)
Income Tax
(Provision)
Benefit (B) (3,043) (253,897) 21,017 189,319
------ -------- ------ -------
Loss from
Continuing
Operations (663,906) (976,051) (1,034,638) (1,752,893)
Earnings from
Discontinued
Operations, net - 863 48,643 5,913
--- --- ------ -----
Net Loss $(663,906) $(975,188) $(985,995) $(1,746,980)
========= ========= ========= ===========
Earnings
(Loss) Per
Share - Basic
and Diluted
Continuing
Operations $(5.34) $(7.95) $(8.32) $(14.35)
Discontinued
Operations - 0.01 0.39 0.05
--- ---- ---- ----
Earnings
(Loss)
Per Share
- Basic
and
Diluted $(5.34) $(7.94) $(7.93) $(14.30)
====== ====== ====== =======
Average Shares
Outstanding -
Basic and
Diluted 124,360,192 122,787,414 124,290,248 122,188,922
(A) See Attachment 3 for detailed home building segment revenues and
earnings.
(B) Includes increases in the valuation allowance related to the deferred
tax assets of $239,303, $500,000, $354,124, and $500,000,
respectively.
(C) Prior periods have been conformed to the current year presentation.
INTEREST ANALYSIS
Quarter Ended Nine Months Ended
December 31, December 31,
(unaudited) (unaudited)
----------- -----------
2008 2007 2008 2007
---- ---- ---- ----
Total Interest Incurred $55,814 $68,206 $170,404 $226,643
Less - Interest Capitalized (35,710) (56,999) (131,301) (178,369)
- Financial Services'
Interest Expense (2,346) (11,207) (10,192) (48,274)
------ ------- ------- -------
Interest Expense, net $17,758 $- $28,911 $-
======= === ======= ===
Capitalized Interest Charged
to Home Building's
Costs and Expenses $67,032 $69,854 $119,799 $209,618
======= ======= ======== ========
Attachment 2
Centex Corporation and Subsidiaries
Condensed Consolidated Balance Sheet
(Dollars in millions)
(unaudited)
BALANCE SHEET
December 31, March 31,
2008 2008
---- ----
Assets
Cash -
Unrestricted $1,472 $587
Restricted 47 51
Receivables -
Residential Mortgage Loans Held
for Sale, net 270 516
Other Receivables 224 824
Inventories -
Direct Construction 1,269 1,746
Land Under Development 2,051 2,883
Land Held for Development
and Sale 490 558
Land Held Under Option
Agreements not Owned 115 148
Other 19 27
Investments 140 207
Property and Equipment, net 40 78
Goodwill 10 52
Deferred Tax Asset, Net of Valuation
Allowance of $1,184 and $830 50 191
Deferred Charges and Other Assets 122 172
Assets of Discontinued Operations - 97
--- --
$6,319 $8,137
====== ======
Liabilities and
Stockholders' Equity
Accounts Payable and Accrued
Liabilities $1,681 $2,064
Senior Notes and Other 3,104 3,325
Financial Services Debt Secured by
Mortgage Loans 158 337
Liabilities of Discontinued
Operations - 34
Minority Interests 61 78
Stockholders' Equity 1,315 2,299
----- -----
$6,319 $8,137
====== ======
Attachment 3
Centex Corporation and Subsidiaries
Home Building Segment Data (A)
(Dollars in thousands, except per unit data)
(Unaudited)
Revenues
--------
2008 2007 Change
---- ---- ------
Quarter Ended December 31,
East $339,570 $561,826 (40%)
Central 261,684 452,258 (42%)
West 240,966 763,002 (68%)
Other
homebuilding 936 33,998 (97%)
--- ------
Total Home
Building $843,156 $1,811,084 (53%)
======== ==========
Closings (Units)
----------------
2008 2007 Change
---- ---- ------
Quarter Ended December 31,
East 1,155 1,929 (40%)
Central 1,476 2,491 (41%)
West 774 2,148 (64%)
Other
homebuilding - 89 (100%)
--- --
Total Home
Building 3,405 6,657 (49%)
===== =====
Average Housing Revenue per Unit
--------------------------------
2008 2007 Change
---- ---- ------
Quarter Ended December 31,
East $280,011 $285,114 (2%)
Central 176,392 180,447 (2%)
West 307,066 354,202 (13%)
Other
homebuilding - 311,101 (100%)
--- -------
Total Home
Building $241,244 $268,588 (10%)
======== ========
Sales (Orders) (Units)
----------------------
2008 2007 Change
---- ---- ------
Quarter Ended December 31,
East 375 1,550 (76%)
Central 508 2,074 (76%)
West 197 1,854 (89%)
Other
homebuilding - 59 (100%)
--- --
Total Home
Building 1,080 5,537 (80%)
===== =====
Sales (Orders) Backlog (Units)
------------------------------
2008 2007 Change
---- ---- ------
Quarter Ended December 31,
East 2,021 2,378 (15%)
Central 1,648 3,365 (51%)
West 959 2,728 (65%)
Other
homebuilding - 42 (100%)
--- --
Total Home
Building 4,628 8,513 (46%)
===== =====
Sales (Orders) Backlog
----------------------
2008 2007 Change
---- ---- ------
Quarter Ended December 31,
East $621,985 $709,982 (12%)
Central 289,836 605,526 (52%)
West 307,690 937,874 (67%)
Other
homebuilding - 13,510 (100%)
--- ------
Total Home
Building $1,219,511 $2,266,892 (46%)
========== ==========
Operating Earnings (Loss)
-------------------------
2008 2007
---- ----
Quarter Ended December 31,
East $(285,977) $(177,125)
Central (61,757) (37,032)
West (262,173) (377,589)
Other
homebuilding 14,861 (33,519)
------ -------
Total Home
Building $(595,046) $(625,265)
========= =========
Impairments & Write-offs (B)
----------------------------
2008 2007
---- ----
Quarter Ended December 31,
East $218,978 $168,761
Central 55,520 37,819
West 244,542 293,706
Other
homebuilding - 29,029
--- ------
Total Home
Building 519,040 529,315
Share of Joint
Venture
Impairments 70,551 24,850
------ ------
Total
Impairments $589,591 $554,165
======== ========
Lots
Controlled
Lots Owned (Units) (Units)
------------------ -----------
2008 2007 2008 2007
---- ---- ---- ----
Quarter Ended December 31,
East 30,192 38,209 4,805 13,790
Central 16,450 24,163 3,760 9,402
West 11,197 21,584 928 7,869
Other
homebuilding 1,324 3,645 - -
----- ----- --- ---
Total Home
Building 59,163 87,601 9,493 31,061
====== ====== ===== ======
(A) Prior periods have been conformed to the current year presentation.
(B) Impairments and write-offs by segment include land-related
impairments and write-offs and goodwill impairments.
Attachment 3 (Continued)
Centex Corporation and Subsidiaries
Home Building Segment Data (A)
(Dollars in thousands, except per unit data)
(Unaudited)
Revenues
--------
2008 2007 Change
---- ---- ------
Nine Months Ended December 31,
East $958,646 $1,856,359 (48%)
Central 855,672 1,423,409 (40%)
West 1,013,637 2,307,220 (56%)
Other
homebuilding 17,496 133,400 (87%)
------ -------
Total Home
Building $2,845,451 $5,720,388 (50%)
========== ==========
Closings (Units)
----------------
2008 2007 Change
---- ---- ------
Nine Months Ended December 31,
East 3,361 6,121 (45%)
Central 4,640 7,672 (40%)
West 3,104 5,993 (48%)
Other
homebuilding 36 316 (89%)
-- ---
Total Home
Building 11,141 20,102 (45%)
====== ======
Average Housing Revenue per Unit
--------------------------------
2008 2007 Change
---- ---- ------
Nine Months Ended December 31,
East $276,843 $296,072 (6%)
Central 182,311 183,919 (1%)
West 323,821 382,944 (15%)
Other
homebuilding 332,861 343,237 (3%)
------- -------
Total Home
Building $250,742 $279,909 (10%)
======== ========
Operating Earnings (Loss)
-------------------------
2008 2007
---- ----
Nine Months Ended December 31,
East $(419,241) $(310,088)
Central (97,709) (64,781)
West (334,566) (1,196,135)
Other
homebuilding 10,603 (178,733)
------ --------
Total Home
Building $(840,913) $(1,749,737)
========= ===========
Impairments & Write-offs (B)
----------------------------
2008 2007
---- ----
Nine Months Ended December 31,
East $289,208 $324,213
Central 85,406 94,494
West 288,315 1,050,432
Other
homebuilding 7,163 172,165
----- -------
Total Home
Building 670,092 1,641,304
Share of Joint
Venture
Impairments 102,232 88,512
------- ------
Total
Impairments $772,324 $1,729,816
======== ==========
Sales (Orders) (Units)
----------------------
2008 2007 Change
---- ---- ------
Nine Months Ended December 31,
East 2,934 5,222 (44%)
Central 3,333 7,048 (53%)
West 1,723 5,548 (69%)
Other
homebuilding 33 146 (77%)
-- ---
Total Home
Building 8,023 17,964 (55%)
===== ======
(A) Prior periods have been conformed to the current year presentation.
(B) Impairments and write-offs by segment include land-related
impairments and write-offs and goodwill impairments.
Attachment 4
Centex Corporation and Subsidiaries
Supplemental Home Building Data
(Dollars in thousands, except per unit data)
(unaudited)
RECONCILIATION OF HOUSING/HOME BUILDING OPERATING EARNINGS
Quarter Ended December 31,
--------------------------
2008 2007
---- ----
HOME BUILDING
Revenues - Housing $821,437 100.0% $1,787,990 100.0%
Cost of Sales - Housing (710,136) (86.4%) (1,564,552) (87.5%)
-------- ----- ---------- -----
Gross Margin - Housing 111,301 13.6% 223,438 12.5%
Selling, General &
Administrative (A) (113,005) (13.8%) (254,952) (14.3%)
-------- ----- -------- -----
Housing Operating
(Loss) Earnings (B) (1,704) (0.2%) (31,514) (1.8%)
Revenues - Land Sales &
Other 21,719 23,094
Cost of Sales - Land
Sales & Other (507,236) (556,320)
-------- --------
Gross Margin - Land
Sales & Other (485,517) (533,226)
Goodwill Impairment (38,101) -
Losses from Unconsolidated
Entities and Other (C) (69,724) (60,525)
------- -------
Operating Loss $(595,046) (70.6%) $(625,265) (34.5%)
========= ----- ========= -----
Average Neighborhoods 499 644
% Change (22.5%) (7.9%)
Nine Months Ended December 31,
------------------------------
2008 2007
---- ----
HOME BUILDING
Revenues - Housing $2,793,516 100.0% $5,626,727 100.0%
Cost of Sales - Housing (2,419,218) (86.6%) (4,787,106) (85.1%)
---------- ----- ---------- -----
Gross Margin -
Housing 374,298 13.4% 839,621 14.9%
Selling, General &
Administrative (A) (428,076) (15.3%) (850,211) (15.1%)
-------- ----- -------- -----
Housing Operating
(Loss) Earnings (B) (53,778) (1.9%) (10,590) (0.2%)
Revenues - Land Sales &
Other 51,935 93,661
Cost of Sales - Land
Sales & Other (705,019) (1,659,126)
-------- ----------
Gross Margin-Land
Sales & Other (653,084) (1,565,465)
Goodwill Impairment (38,101) (61,322)
Losses from
Unconsolidated Entities
and Other (C) (95,950) (112,360)
------- --------
Operating
Loss $(840,913) (29.6%) $(1,749,737) (30.6%)
========= ----- =========== -----
Average Neighborhoods 529 659
% Change (19.7%) (3.9%)
(A) Selling, General & Administrative expenses above are those associated
with field operations.
(B) Housing Operating Earnings is defined as housing revenues less housing
cost of sales less selling, general & administrative expenses.
Housing Operating Margin is defined as housing operating earnings
divided by total housing revenues.
(C) Includes losses from unconsolidated entities of $74,396, $63,140,
$107,595 and $125,333, respectively.
IMPAIRMENTS AND WRITE-OFFS
Quarter Ended Nine Months Ended
December 31, December 31,
------------- -----------------
2008 2007 2008 2007
---- ---- ---- ----
Impairment Charges $467,074 $502,949 $594,079 $1,492,428
Write-offs of Land Deposits and Pre-
Acquisition Costs 13,865 26,366 37,912 87,554
Goodwill Impairment 38,101 - 38,101 61,322
------ --- ------ ------
Subtotal 519,040 529,315 670,092 1,641,304
Share of Joint Venture Impairments 70,551 24,850 102,232 88,512
------ ------ ------- ------
Total Impairments and Write-offs $589,591 $554,165 $772,324 $1,729,816
======== ======== ======== ==========
SOURCE Centex Corporation
