CENTEX CORP SHARES OF COM STK US$0.25 
By
Highlights of the quarter ended
-- Sales (orders) decreased 54% (down 42% on a per neighborhood basis) to
2,728
-- Loss from continuing operations of $1.62 per diluted share
-- Reduced homebuilding SG&A expenses by 50% or $148 million
-- Generated positive cash flow from homebuilding operations
-- Reduced debt outstanding by $150 million during the quarter
-- Sept. 30 cash balance of $1.30 billion
"The homebuilding industry continues to grapple with unprecedented
economic conditions. Centex has prepared for this kind of environment by
building a strong cash position, consolidating operations and significantly
shortening the Company's land position. We improved our gross margins and
generated positive cash from operations despite the extreme weakness in the
housing market," said
Corporate Results
Fiscal second quarter revenues were
The fiscal second quarter's corporate general and administrative expenses
were
Home Building
Fiscal second 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 second 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 second
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 or business conditions,
including employment levels and interest rates; (3) the effects of the current
downturn in the homebuilding industry, including potential adverse market
conditions 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; and (8) our ability
to generate cash from sales of assets and other sources that supplement our
existing cash resources. 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 Six Months Ended
September 30, September 30,
(unaudited) (unaudited)
2008 2007 (C) Change 2008 2007 (C) Change
Revenues
Home
Building
(A) $952,596 $2,105,484 (55%) $2,002,295 $3,909,304 (49%)
Financial
Services 52,409 80,700 (35%) 128,832 178,666 (28%)
Total $1,005,005 $2,186,184 (54%) $2,131,127 $4,087,970 (48%)
Operating
Earnings
(Loss)
Home
Building
(A) $(114,764) $(952,693) $(245,867) $(1,124,472)
Financial
Services (44,158) (54,082) (38,091) (39,113)
Other 5,285 18,122 12,393 23,048
Total
Operating
Earnings
(Loss) (153,637) (988,653) (271,565) (1,140,537)
Corporate
General
and
Admini-
strative
Expenses (53,435) (34,540) (112,074) (79,521)
Interest
Expense (4,973) - (11,153) -
Loss from
Continuing
Operations
Before
Income
Taxes (212,045) (1,023,193) (394,792) (1,220,058)
Income Tax
Benefit (B) 10,425 378,432 24,060 443,216
Loss from
Continuing
Operations (201,620) (644,761) (370,732) (776,842)
Earnings from
Discontinued
Operations,
net 29,630 928 48,643 5,050
Net Loss $(171,990) $(643,833) $(322,089) $(771,792)
Earnings (Loss)
Per Share -
Basic and
Diluted
Continuing
Operations $(1.62) $(5.27) $(2.98) $(6.37)
Discontinued
Operations 0.24 0.01 0.39 0.04
Earnings
(Loss)
Per Share
- Basic
and
Diluted $(1.38) $(5.26) $(2.59) $(6.33)
Average Shares
Outstanding -
Basic and
Diluted 124,278,555 122,301,587 124,255,085 121,888,041
(A) See Attachment 3 for detailed home building segment revenues and
earnings.
(B) Current periods include an increase in the valuation allowance related
to the deferred tax assets of $65,517 and $114,821, respectively.
(C) Prior periods have been conformed to the current year presentation.
INTEREST ANALYSIS
Quarter Ended Six Months Ended
September 30, September 30,
(unaudited) (unaudited)
2008 2007 2008 2007
Total Interest Incurred $52,838 $76,086 $114,590 $158,437
Less - Interest Capitalized (44,322) (59,507) (95,591) (121,370)
- Financial Services'
Interest Expense (3,543) (16,579) (7,846) (37,067)
Interest Expense, net $4,973 $- $11,153 $-
Capitalized Interest Charged to
Home Building's Costs and
Expenses $27,232 $96,698 $52,767 $139,764
Attachment 2
Centex Corporation and Subsidiaries
Condensed Consolidated Balance Sheet
(Dollars in millions)
(unaudited)
BALANCE SHEET
September 30, March 31,
2008 2008
Assets
Cash -
Unrestricted $1,299 $587
Restricted 50 51
Receivables -
Residential Mortgage Loans
Held for Sale, net 419 516
Other Receivables 303 824
Inventories -
Direct Construction 1,481 1,746
Land Under Development 2,407 2,883
Land Held for Development and Sale 624 558
Land Held Under Option Agreements
not Owned 148 148
Other 17 27
Investments 210 207
Property and Equipment, net 60 78
Goodwill 48 52
Deferred Tax Asset, Net of Valuation
Allowance of $945 and $830 65 191
Deferred Charges and Other Assets 154 172
Assets of Discontinued Operations - 97
$7,285 $8,137
Liabilities and Stockholders' Equity
Accounts Payable and Accrued Liabilities $1,843 $2,064
Senior Notes and Other 3,104 3,325
Financial Services Debt Secured by
Mortgage Loans 300 337
Liabilities of Discontinued Operations - 34
Minority Interests 65 78
Stockholders' Equity 1,973 2,299
$7,285 $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 September 30,
East $311,037 $731,716 (57%)
Central 295,809 522,574 (43%)
West 343,484 794,448 (57%)
Other homebuilding 2,266 56,746 (96%)
Total Home Building $952,596 $2,105,484 (55%)
Closings (Units)
2008 2007 Change
Quarter Ended September 30,
East 1,118 2,424 (54%)
Central 1,595 2,774 (43%)
West 1,084 2,035 (47%)
Other homebuilding - 117 (100%)
Total Home Building 3,797 7,350 (48%)
Average Housing Revenue per Unit
2008 2007 Change
Quarter Ended September 30,
East $275,459 $293,354 (6%)
Central 181,251 186,497 (3%)
West 316,263 388,516 (19%)
Other homebuilding - 384,043 (100%)
Total Home Building $247,534 $280,816 (12%)
Sales (Orders) (Units)
2008 2007 Change
Quarter Ended September 30,
East 1,059 1,725 (39%)
Central 1,075 2,370 (55%)
West 594 1,801 (67%)
Other homebuilding - 57 (100%)
Total Home Building 2,728 5,953 (54%)
Sales (Orders) Backlog (Units)
2008 2007 Change
Quarter Ended September 30,
East 2,801 2,757 2%
Central 2,616 3,782 (31%)
West 1,536 3,022 (49%)
Other homebuilding - 72 (100%)
Total Home Building 6,953 9,633 (28%)
Sales (Orders) Backlog
2008 2007 Change
Quarter Ended September 30,
East $867,366 $825,995 5%
Central 472,893 699,443 (32%)
West 494,599 1,125,275 (56%)
Other homebuilding - 26,674 (100%)
Total Home Building $1,834,858 $2,677,387 (31%)
Operating Earnings (Loss)
2008 2007
Quarter Ended September 30,
East $(46,462) $(137,533)
Central (22,482) (33,258)
West (41,906) (673,590)
Other homebuilding (3,914) (108,312)
Total Home Building $(114,764) $(952,693)
Impairments & Write-offs (B)
2008 2007
Quarter Ended September 30,
East $30,174 $137,629
Central 19,408 50,818
West 34,091 646,315
Other homebuilding 7,163 111,765
Total Home Building 90,836 946,527
Share of Joint Venture
Impairments 11,983 36,612
Total Impairments $102,819 $983,139
Lots Owned (Units) Lots Controlled (Units)
2008 2007 2008 2007
Quarter Ended September 30,
East 32,532 39,940 5,919 18,615
Central 17,223 25,723 4,456 11,767
West 12,232 22,715 1,491 9,098
Other homebuilding 1,324 3,657 - -
Total Home Building 63,311 92,035 11,866 39,480
(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
Six Months Ended September 30,
East $619,076 $1,294,533 (52%)
Central 593,988 971,151 (39%)
West 772,671 1,544,218 (50%)
Other homebuilding 16,560 99,402 (83%)
Total Home Building $2,002,295 $3,909,304 (49%)
Closings (Units)
2008 2007 Change
Six Months Ended September 30,
East 2,206 4,192 (47%)
Central 3,164 5,181 (39%)
West 2,330 3,845 (39%)
Other homebuilding 36 227 (84%)
Total Home Building 7,736 13,445 (42%)
Average Housing Revenue per Unit
2008 2007 Change
Six Months Ended September 30,
East $275,184 $301,114 (9%)
Central 185,072 185,588 -%
West 329,387 399,002 (17%)
Other homebuilding 332,861 355,837 (6%)
Total Home Building $254,922 $285,514 (11%)
Operating Earnings (Loss)
2008 2007
Six Months Ended September 30,
East $(133,264) $(132,963)
Central (35,952) (27,749)
West (72,393) (818,546)
Other homebuilding (4,258) (145,214)
Total Home Building $(245,867) $(1,124,472)
Impairments & Write-offs (B)
2008 2007
Six Months Ended September 30,
East $70,230 $155,452
Central 29,886 56,675
West 43,773 756,726
Other homebuilding 7,163 143,136
Total Home Building 151,052 1,111,989
Share of Joint Venture
Impairments 31,681 63,662
Total Impairments $182,733 $1,175,651
Sales (Orders) (Units)
2008 2007 Change
Six Months Ended September 30,
East 2,559 3,672 (30%)
Central 2,825 4,974 (43%)
West 1,526 3,694 (59%)
Other homebuilding 33 87 (62%)
Total Home Building 6,943 12,427 (44%)
(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 September 30,
2008 2007
HOME BUILDING
Revenues - Housing $939,888 100.0% $2,063,999 100.0%
Cost of Sales - Housing (798,956) (85.0%) (1,741,203) (84.4%)
Gross Margin - Housing 140,932 15.0% 322,796 15.6%
Selling, General &
Administrative (A) (148,856) (15.8%) (296,631) (14.3%)
Housing Operating (Loss)
Earnings (B) (7,924) (0.8%) 26,165 1.3%
Revenues - Land Sales
& Other 12,708 41,485
Cost of Sales - Land Sales
& Other (109,521) (927,239)
Gross Margin - Land Sales
& Other (96,813) (885,754)
Goodwill Impairment - (61,322)
Losses from Unconsolidated
Entities and Other (C) (10,027) (31,782)
Operating Loss $(114,764) (12.0%) $(952,693) (45.2%)
Average Neighborhoods 523 658
% Change (20.5%) (4.9%)
Six Months Ended September 30,
2008 2007
HOME BUILDING
Revenues - Housing $1,972,079 100.0% $3,838,737 100.0%
Cost of Sales - Housing (1,709,082) (86.6%) (3,222,554) (83.9%)
Gross Margin - Housing 262,997 13.4% 616,183 16.1%
Selling, General &
Administrative (A) (315,071) (16.0%) (595,259) (15.6%)
Housing Operating (Loss)
Earnings (B) (52,074) (2.6%) 20,924 0.5%
Revenues - Land Sales
& Other 30,216 70,567
Cost of Sales - Land Sales
& Other (197,783) (1,102,806)
Gross Margin - Land Sales
& Other (167,567) (1,032,239)
Goodwill Impairment - (61,322)
Losses from Unconsolidated
Entities and Other (C) (26,226) (51,835)
Operating Loss $(245,867) (12.3%) $(1,124,472) (28.8%)
Average Neighborhoods 546 667
% Change (18.1%) (1.9%)
(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 $12,902, $36,840,
$33,199 and $62,193, respectively
IMPAIRMENTS AND WRITE-OFFS
Quarter Ended Six Months Ended
September 30, September 30,
2008 2007 2008 2007
Impairment Charges $76,890 $846,887 $127,005 $989,479
Write-offs of Land Deposits
and Pre-Acquisition Costs 13,946 38,318 24,047 61,188
Goodwill Impairment - 61,322 - 61,322
Subtotal 90,836 946,527 151,052 1,111,989
Share of Joint Venture
Impairments 11,983 36,612 31,681 63,662
Total Impairments and
Write-offs $102,819 $983,139 $182,733 $1,175,651
SOURCE Centex Corporation
