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Centex Reports Fourth Quarter and Fiscal Year Results
DALLAS, April 30 /PRNewswire-FirstCall/ -- Centex Corporation (
CTX), today reported financial results for its fiscal fourth quarter and
fiscal year ended March 31, 2007.
Highlights of the quarter ended March 31, 2007 (compared to last year's
fourth quarter):
* Total revenues decreased 11% to $3.67 billion
* Home closings decreased 14% to 10,582
* Loss from continuing operations was $0.18 per diluted share
* Reduced inventory of unsold homes by 23% in the quarter
* Unit backlog declined 39% on a decrease in sales (orders) of 21%
Highlights of fiscal year 2007 (compared to fiscal year 2006):
* Total revenues decreased 7% to $12.0 billion
* Earnings per diluted share of $2.16
* Home closings decreased 9% to 35,785
* Generated $1 billion of operating cash flow
* Successfully sold sub-prime mortgage and commercial contracting
businesses
"In reacting to one of the most difficult markets in 25 years, we
accomplished important goals that lay the groundwork for the future," said
Tim Eller, chairman and CEO of Centex Corp. "We reduced costs, continued to
align our land position with current demand and generated $1 billion in
cash. Additionally, we profitably sold our sub-prime mortgage and
commercial contracting businesses. Although we still see uncertainty in
many of our markets, we are in position to increase our market share and
generate additional cash."
CORPORATE RESULTS
Net earnings for fiscal 2007 totaled $268 million, or $2.16 per diluted
share, down from $1.29 billion, or $9.71 per diluted share, in the prior
year. The loss from continuing operations for fiscal 2007 was $12 million,
or a loss of $0.09 per diluted share, down from earnings of $1.21 billion,
or $9.09 per diluted share in the previous year.
Net earnings for the fourth quarter of fiscal 2007 totaled $199
million, or $1.60 per diluted share, down from $392 million, or $3.04 per
diluted share, in the prior year's fourth quarter. The loss from continuing
operations for fiscal 2007's fourth quarter was $22 million, or a loss of
$0.18 per diluted share, down from earnings of $369 million, or $2.86 per
diluted share in the previous year's fourth quarter. Included in the fourth
quarter of fiscal 2007's loss from continuing operations is $202 million,
or $1.01 per diluted share, of land option write-offs and land valuation
adjustments.
HOME BUILDING
Fiscal 2007's fourth quarter revenues were $3.52 billion, 12% lower
than the same quarter last year as a result of a 14% year over year
decrease in closings to 10,582 homes. Home building reported an operating
loss of $17 million for the quarter, after the write off of $96 million of
land option deposits and pre-acquisition costs and $106 million of land
valuation adjustments, including $18 million from joint ventures. Housing
operating earnings (housing revenues less housing cost of sales and SG&A)
were $186 million, down 69%, as a result of higher discounts and sales
incentives. The margin from housing operations was 5.6% in this year's
fourth quarter, aided by a 31% decrease in general and administrative
expenses. The total home building operating margin for the quarter,
including all land related expenses, was a negative 0.5%, due to higher
discounts and incentives, the land option write-offs and land valuation
adjustments.
For fiscal year 2007, revenues were $11.41 billion, 7% lower than last
year. Reported home building operating earnings were $97 million, 95% below
last year. For the year, unit closings decreased 9% to 35,785 homes.
FINANCIAL SERVICES
Operating earnings from Financial Services totaled $19 million for the
fourth quarter of fiscal 2007, 10% lower than the same quarter a year ago.
CTX Mortgage originated loans for 82% of Centex Homes' buyers during the
fourth quarter, up five percentage points versus last year's fourth
quarter. Centex's Financial Services operations provide Centex home buyers
with a streamlined home-closing and settlement process.
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's senior management will conduct a conference call to discuss
the fourth quarter fiscal year 2007 financial results at 10 a.m. Eastern
Time (9 a.m. Central Time) on Tuesday, May 1. The conference call,
accompanied by a slide presentation, will be webcast simultaneously on the
Centex Web site at http://www.centex.com . A replay of the call, as well as
the presentation, will be archived on that site.
Forward-Looking Statements. This press release contains 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 Centex
is discussing its beliefs, estimates or expectations. Such statements
include projections, forecasts, and plans and objectives of management for
future operations and operating and financial performance, as well as any
related assumptions. These statements are not historical facts or
guarantees of future performance but instead represent only Centex's belief
at the time the statements were made regarding future events, which are
subject to significant risks, uncertainties and other factors, many of
which are outside of Centex's control. Actual results and outcomes may
differ materially from what is expressed or forecast in such
forward-looking statements. These risks and uncertainties are described in
greater detail in Centex's most recent Annual Report on Form 10-K for the
fiscal year ended March 31, 2006 (including under the captions "Risk
Factors" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations"), as well as recent Quarterly Reports on Form
10-Q and Current Reports on Form 8-K, which are on file with the SEC and
may be obtained free of charge through the Web site maintained by the SEC
at http://www.sec.gov. The factors discussed in these reports include, but
are not limited to, changes in national or regional economic or business
conditions, including employment levels and interest rates, competition,
customer cancellations, shortages or price changes in raw materials or
labor, and other factors that could affect demand for our homes or mortgage
loans or the profitability of our operations. All forward-looking
statements made in this press release are made as of the date hereof, and
the risk that actual results will differ materially from expectations
expressed in this press release will increase with the passage of time.
Centex makes no commitment, and disclaims any duty, to update or revise any
forward-looking statement to reflect future events or changes in Centex's
expectations.
NOTE ATTACHMENTS:
(1) Revenues and Earnings by Lines of Business
(2) Condensed Consolidated Balance Sheets
(3) Condensed Consolidated Cash Flows
(4) Supplemental Home Building Data
(5) Housing Activity by Geographic Area
(6) Housing Activity Dollar Values by Geographic Area
(7) Supplemental Financial Services Data
(8) Supplemental Financial Data
(9) Reconciliation of Housing/Home Building Operating Earnings
Attachment 1
Centex Corporation and Subsidiaries
Revenues and Earnings by Lines of Business
(Dollars in thousands, except per share data)
Quarter Ended
March 31,
(unaudited)
2007 2006 [B] Change
Revenues
Home Building $3,519,692 $3,980,967 (12%)
Financial Services [A] 117,105 118,498 (1%)
Other 32,066 30,664 5%
Total $3,668,863 $4,130,129 (11%)
Operating Earnings
Home Building [C] $(16,843) $601,349 (103%)
Financial Services [A] 18,783 20,922 (10%)
Other 267 1,029 (74%)
Total Operating Earnings 2,207 623,300 (100%)
Corporate General Expenses [C] (9,498) (29,220)
Interest Expense --- (3,362)
Earnings (Loss) from Continuing
Operations Before Income Taxes (7,291) 590,718 (101%)
Income Taxes (14,994) (221,758)
Earnings (Loss) from Continuing
Operations (22,285) 368,960 (106%)
Earnings from Discontinued
Operations, net [A] 221,140 22,809
Net Earnings $198,855 $391,769 (49%)
Earnings Per Share - Basic
Earnings (Loss) per Share -
Continuing Operations $(0.18) $2.99 (106%)
Earnings per Share - Discontinued
Operations 1.83 0.18
Earnings Per Share -
Basic $1.65 $3.17 (48%)
Earnings Per Share - Diluted
Earnings (Loss) per Share -
Continuing Operations $(0.18) $2.86 (106%)
Earnings per Share - Discontinued
Operations 1.78 0.18
Earnings Per Share -
Diluted $1.60 $3.04 (47%)
Average Shares Outstanding:
Basic 120,627,559 123,622,796 (2%)
Diluted 124,068,032 128,732,705 (4%)
Centex Corporation and Subsidiaries
Revenues and Earnings by Lines of Business
(Dollars in thousands, except per share data)
Fiscal Year Ended
March 31,
(unaudited)
2007 2006 (B) Change
Revenues
Home Building $11,414,827 $12,272,203 (7%)
Financial Services [A] 468,001 462,223 1%
Other 131,739 117,438 12%
Total $12,014,567 $12,851,864 (7%)
Operating Earnings
Home Building [C] $96,821 $1,905,812 (95%)
Financial Services [A] 84,530 84,465 ---%
Other (1,525) (5,779) 74%
Total Operating Earnings 179,826 1,984,498 (91%)
Corporate General Expenses [C] (77,053) (100,155)
Interest Expense --- (12,067)
Earnings (Loss) from Continuing
Operations
Before Income Taxes 102,773 1,872,276 (95%)
Income Taxes (114,553) (665,187)
Earnings (Loss) from Continuing
Operations (11,780) 1,207,089 (101%)
Earnings from Discontinued
Operations, net [A] 280,146 82,224
Net Earnings $268,366 $1,289,313 (79%)
Earnings Per Share - Basic
Earnings (Loss) per Share -
Continuing Operations $(0.10) $9.51 (101%)
Earnings per Share - Discontinued
Operations 2.33 0.65
Earnings Per Share -
Basic $2.23 $10.16 (78%)
Earnings Per Share - Diluted
Earnings (Loss) per Share -
Continuing Operations $(0.09) $9.09 (101%)
Earnings per Share - Discontinued
Operations 2.25 0.62
Earnings Per Share -
Diluted $2.16 $9.71 (78%)
Average Shares Outstanding:
Basic 120,537,235 126,870,887 (5%)
Diluted 124,410,244 132,749,797 (6%)
[A] Financial Services excludes the Centex Home Equity operations which
were sold in July 2006 and are reflected in discontinued operations.
In addition, Construction Services, which was sold in March 2007, is
also reflected in discontinued operations.
[B] Certain prior year items have been reclassified to conform to current
period classifications.
[C] Centex is reorganizing its reporting segments which will be disclosed
in its fiscal 2007 Form 10-K. As part of the reorganization of
reporting segments, a portion of its Home Building SG&A costs will be
reported as Corporate General Expenses, which will more appropriately
reflect the alignment of its operations.
Attachment 2
Centex Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Dollars in millions)
(unaudited)
Centex Corporation Centex Financial
and Subsidiaries Corporation [A] Services
March 31, March 31, March 31,
2007 2006 2007 2006 2007 2006
Assets
Cash -
Unrestricted $883 $43 $871 $33 $12 $10
Restricted 146 133 57 69 89 64
Receivables -
Mortgage Loans
Receivable 1,694 2,130 --- --- 1,694 2,130
Other Receivables 228 326 176 283 52 43
Inventories -
Homebuilding 8,654 8,832 8,654 8,832 --- ---
Land Held Under
Option Agreements
not Owned 282 818 282 818 --- ---
Other 15 12 6 5 9 7
Investments 282 308 419 963 --- ---
Property and
Equipment, net 136 178 119 156 17 22
Goodwill 219 218 210 206 9 12
Deferred Charges and
Other Assets 667 468 629 429 38 39
Assets of
Discontinued
Operations [B] --- 7,899 --- 389 --- 7,510
$13,206 $21,365 $11,423 $12,183 $1,920 $9,837
Liabilities and
Stockholders' Equity
Accounts Payable and
Accrued Liabilities $2,350 $2,182 $2,231 $2,080 $95 $93
Debt -
Non-Financial
Services 3,904 3,982 3,904 3,982 --- ---
Financial Services 1,663 2,077 --- --- 1,663 2,077
Liabilities of
Discontinued
Operations [B] --- 7,581 --- 579 --- 7,002
Minority Interests 177 531 176 530 1 1
Stockholders' Equity 5,112 5,012 5,112 5,012 161 664
$13,206 $21,365 $11,423 $12,183 $1,920 $9,837
[A] In the supplemental data presented above, "Centex Corporation"
represents the consolidation of all subsidiaries other than those
included in Financial Services. Transactions between Centex
Corporation and Financial Services have been eliminated from the
Centex Corporation and Subsidiaries balance sheets. We present the
consolidating information shown above and believe that it is useful to
investors because it enables them to compare our homebuilding
operations more readily to the businesses of other homebuilding
companies that do not have significant financial services operations.
We also believe that separate disclosure of the consolidating
information is appropriate because: the Financial Services
subsidiaries operate in a distinctly different financial environment
that generally requires significantly less equity to support their
higher debt levels compared to the operations of our other
subsidiaries; the Financial Services subsidiaries have structured
their financing programs substantially on a stand-alone basis; and
Centex Corporation has limited obligations with respect to the
indebtedness of its Financial Services subsidiaries. Management uses
this information in its financial and strategic planning.
[B] The assets and liabilities of discontinued operations at
March 31, 2006 include the Centex Home Equity operations, sold in
July 2006 and the Construction Services operations, sold in
March 2007.
Attachment 3
Centex Corporation and Subsidiaries
Condensed Consolidated Cash Flows
(Dollars in millions)
(unaudited)
Centex Centex
Corporation and Corporation Financial
Subsidiaries[A] [A][B] Services[A]
For the For the For the
Fiscal Fiscal Fiscal
Year Ended Year Ended Year Ended
March 31, March 31, March 31,
2007 2006 2007 2006 2007 2006
Cash Flows - Operating
Activities
Net Earnings $268 $1,289 $268 $1,289 $102 $119
Adjustments -
Depreciation and
Amortization 60 63 52 48 8 15
Other Noncash
Adjustments 285 82 812 14 (32) 22
Decrease (Increase) in Loans
Held for Sale 519 (200) --- --- 519 (200)
Increase in Inventories (481) (2,484) (479) (2,484) (2) ---
Other Operating Activities 298 487 277 466 (16) 57
949 (763) 930 (667) 579 13
Cash Flows - Investing
Activities
(Increase) Decrease in Loans
Held for Investment (292) 952 --- --- (292) 952
Other Investing Activities 381 (52) 46 77 370 (165)
89 900 46 77 78 787
Cash Flows - Financing
Activities
(Decrease) Increase in Short-
Term Debt, net (347) 765 (125) 119 (222) 646
Issuance of Long-Term Debt,
net 422 (729) 207 629 215 (1,358)
Other Financing Activities (278) (626) (224) (610) (649) (89)
(203) (590) (142) 138 (656) (801)
Effect of Exchange Rate on Cash --- (1) --- (1) --- ---
Net Increase (Decrease) in
Cash and Cash Equivalents 835 (454) 834 (453) 1 (1)
Cash and Cash Equivalents at
Beginning of Period 48 502 37 490 11 12
Cash and Cash Equivalents at
End of Period $883 $48 $871 $37 $12 $11
[A] Beginning cash balances include cash from the discontinued operations
of Centex Construction and Financial Services' Home Equity operations
- approximately $5 million as of March 31, 2006 and $6 million at
March 31, 2005.
[B] In the supplemental data presented above, "Centex Corporation"
represents the consolidation of all subsidiaries other than those
included in Financial Services. Transactions between Centex
Corporation and Financial Services have been eliminated from the
Centex Corporation and Subsidiaries cash flows. We present the
consolidating information shown above and believe that it is useful to
investors because it enables them to compare our homebuilding
operations more readily to the businesses of other homebuilding
companies that do not have significant financial services operations.
We also believe that separate disclosure of the consolidating
information is appropriate because: the Financial Services
subsidiaries operate in a distinctly different financial environment
that generally requires significantly less equity to support their
higher debt levels compared to the operations of our other
subsidiaries; the Financial Services subsidiaries have structured
their financing programs substantially on a stand-alone basis; and
Centex Corporation has limited obligations with respect to the
indebtedness of its Financial Services subsidiaries. Management uses
this information in its financial and strategic planning.
Attachment 4
Centex Corporation and Subsidiaries
Supplemental Home Building Data
(Dollars in thousands, except per unit data)
(unaudited)
Quarter Ended March 31,
2007 2006
HOME BUILDING
Revenues - Housing $3,334,989 100.0% $3,890,256 100.0%
Cost of Sales - Housing (2,745,162) (82.3%) (2,782,087) (71.5%)
Gross Margin - Housing 589,827 17.7% 1,108,169 28.5%
Revenues - Land Sales &
Other 184,703 90,711
Cost of Sales - Land
Sales & Other (381,850) (100,823)
Gross Margin -
Land Sales & Other (197,147) (10,112)
Total Gross Margin 392,680 11.2% 1,098,057 27.6%
Selling, General &
Administrative (403,446) (11.5%) (515,432) (12.9%)
Other Income (Expense) [A] (6,077) (0.2%) 18,724 0.4%
Operating Earnings (Loss) $(16,843) (0.5%) $601,349 15.1%
Units Closed 10,582 12,336
Average Unit Sales Price $315,157 $315,358
% Change (0.1%) 9.8%
Average Neighborhoods 694 646
% Change 7.4% 5.4%
[A] Other Income (Expense) includes earnings (loss) from unconsolidated
entities.
Centex Corporation and Subsidiaries
Supplemental Home Building Data
(Dollars in thousands, except per unit data)
(unaudited)
Fiscal Year Ended March 31,
2007 2006
HOME BUILDING
Revenues - Housing $11,014,975 100.0% $11,920,634 100.0%
Cost of Sales - Housing (8,599,465) (78.1%) (8,458,995) (71.0%)
Gross Margin - Housing 2,415,510 21.9% 3,461,639 29.0%
Revenues - Land Sales &
Other 399,852 351,569
Cost of Sales - Land
Sales & Other (1,044,455) (296,938)
Gross Margin -
Land Sales & Other (644,603) 54,631
Total Gross Margin 1,770,907 15.5% 3,516,270 28.7%
Selling, General &
Administrative (1,631,533) (14.3%) (1,696,456) (13.8%)
Other Income (Expense) [A] (42,553) (0.4%) 85,998 0.6%
Operating Earnings (Loss) $96,821 0.8% $1,905,812 15.5%
Units Closed 35,785 39,232
Average Unit Sales Price $307,810 $303,850
% Change 1.3% 12.6%
Average Neighborhoods 687 626
% Change 9.7% 6.3%
[A] Other Income (Expense) includes earnings (loss) from unconsolidated
entities.
LOT POSITION
As of March 31,
2007 2006 Change
Lots Owned and Controlled:
Lots Owned 98,311 108,828 (10%)
Lots Controlled 61,709 186,893 (67%)
Total 160,020 295,721 (46%)
Attachment 5
Centex Corporation and Subsidiaries
Supplemental Home Building Data
Housing Activity (Units) by Geographic Area
(Unaudited)
Closings
Quarter Ended Fiscal Year Ended
March 31, March 31,
2007 2006 Change 2007 2006 Change
Mid-Atlantic 1,738 2,079 (16%) 6,720 7,182 (6%)
Southeast 1,875 2,510 (25%) 5,883 7,235 (19%)
Midwest 1,370 2,159 (37%) 5,587 7,153 (22%)
Southwest 3,176 3,354 (5%) 10,401 10,720 (3%)
West Coast 2,423 2,234 8% 7,194 6,942 4%
10,582 12,336 (14%) 35,785 39,232 (9%)
Sales (Orders) Backlog
As of March 31,
2007 2006 Change
Mid-Atlantic 1,848 3,073 (40%)
Southeast 1,672 4,116 (59%)
Midwest 1,938 2,755 (30%)
Southwest 3,125 4,094 (24%)
West Coast 2,068 3,349 (38%)
10,651 17,387 (39%)
Sales (Orders)
Quarter Ended Fiscal Year Ended
March 31, March 31,
2007 2006 Change 2007 2006 Change
Mid-Atlantic 1,520 1,785 (15%) 5,495 6,833 (20%)
Southeast 986 1,470 (33%) 3,439 6,345 (46%)
Midwest 1,256 1,840 (32%) 4,770 6,596 (28%)
Southwest 2,513 2,765 (9%) 9,432 11,126 (15%)
West Coast 1,557 2,068 (25%) 5,913 7,130 (17%)
7,832 9,928 (21%) 29,049 38,030 (24%)
Attachment 6
Centex Corporation and Subsidiaries
Supplemental Home Building Data
Housing Activity (Values) by Geographic Area
(Unaudited)
Housing Revenues - Closings
(Dollars in thousands)
Quarter Ended March 31,
2007 2006 Change
Mid-Atlantic $548,167 $708,838 (23%)
Southeast 594,771 752,802 (21%)
Midwest 347,750 485,262 (28%)
Southwest 652,193 748,355 (13%)
West Coast 1,192,108 1,194,999 ---%
$3,334,989 $3,890,256 (14%)
Centex Corporation and Subsidiaries
Supplemental Home Building Data
Housing Activity (Values) by Geographic Area
(Unaudited)
Housing Revenues - Closings
(Dollars in thousands)
Fiscal Year Ended March 31,
2007 2006 Change
Mid-Atlantic $2,179,199 $2,422,302 (10%)
Southeast 1,782,449 2,089,115 (15%)
Midwest 1,304,583 1,583,002 (18%)
Southwest 2,158,665 2,119,540 2%
West Coast 3,590,079 3,706,675 (3%)
$11,014,975 $11,920,634 (8%)
Sales (Orders) Backlog Value
(Dollars in thousands)
As of March 31,
2007 2006 Change
Mid-Atlantic $611,057 $1,044,086 (41%)
Southeast 517,343 1,350,484 (62%)
Midwest 422,313 644,140 (34%)
Southwest 661,405 968,250 (32%)
West Coast 963,841 1,766,748 (45%)
$3,175,959 $5,773,708 (45%)
Attachment 7
Centex Corporation and Subsidiaries
Supplemental Financial Services Data
(Unaudited)
CTX Mortgage Company
Quarter Ended Fiscal Year Ended
March 31, March 31,
2007 2006 Change 2007 2006 Change
Originations
Builder 8,254 8,884 (7%) 27,141 27,364 (1%)
Retail 6,770 8,291 (18%) 30,638 43,319 (29%)
Total 15,024 17,175 (13%) 57,779 70,683 (18%)
Loan Volume
(in billions) $3.69 $3.99 (8%) $13.83 $15.83 (13%)
Average Loan Size $245,500 $232,300 6% $239,300 $223,900 7%
Operating Profit
per Loan $1,250 $1,218 3% $1,463 $1,195 22%
Attachment 8
Centex Corporation and Subsidiaries
Supplemental Financial Data - Debt-to-Capitalization Ratio
(Dollars in millions)
(Unaudited)
As of As of As of
March 31, March 31, March 31,
2007 2006 2005
Consolidated Debt/Capitalization [A]
Debt $5,567 $6,059 $4,804
Minority Interests 177 531 457
Less Minority Interests
on Lot Options [C] (153) (492) (416)
Stockholders' Equity 5,112 5,012 4,281
Capitalization 10,703 11,110 9,126
Less Unrestricted Cash (883) (43) (496)
Net Capitalization $9,820 $11,067 $8,630
Consolidated Debt-to-
Capitalization Ratio 52.0% 54.5% 52.6%
Consolidated Net Debt-to-
Capitalization Ratio [D] 47.7% 54.4% 49.9%
Debt/Capitalization, Excluding
Financial Services [B]
Debt $3,904 $3,982 $3,108
Minority Interests 176 530 456
Less Minority Interests
on Lot Options [C] (153) (492) (416)
Stockholders' Equity 5,112 5,012 4,281
Capitalization 9,039 9,032 7,429
Less Unrestricted Cash (871) (33) (485)
Net Capitalization $8,168 $8,999 $6,944
Debt-to-Capitalization Ratio 43.2% 44.1% 41.8%
Net Debt-to-Capitalization Ratio [D] 37.1% 43.9% 37.8%
[A] Consolidated capitalization includes debt, minority interest
(excluding lot options), and stockholders' equity, including
Financial Services.
[B] Capitalization includes debt, minority interest (excluding lot
options), and stockholders' equity. Capitalization presented above
reflects Financial Services on an equity basis and does not include
debt or minority interests attributable to Financial Services.
[C] Pursuant to the provisions of Financial Accounting Standards Board
("FASB") Interpretation No. 46, "Consolidation of Variable Interest
Entities," as revised ("FIN 46"), the Company consolidates certain
lot option agreements and records the deposit and remaining purchase
price related to these options as land held under option agreements
not owned with a corresponding increase in minority interests. These
minority interests are excluded from the debt-to-capitalization ratio
as the Company is not obligated to purchase the properties and pay
these amounts.
[D] Net debt-to-capitalization ratios are provided reflecting net
capitalization, including net debt (debt less unrestricted cash),
minority interest (excluding lot options), and stockholders' equity.
We believe this ratio reflects the debt/capitalization structure in a
more inclusive manner as unrestricted cash could be applied to reduce
debt at quarter end. See Attachment 2 for more information.
Debt-to-capitalization is a common financial ratio used in the
homebuilding industry to evaluate debt capacity and leverage.
Attachment 9
Centex Corporation and Subsidiaries
Reconciliation of Housing/Home Building Operating Earnings
(Dollars in thousands)
(unaudited)
Quarter Ended March 31,
2007 2006
HOME BUILDING
Revenues - Housing $3,334,989 100.0% $3,890,256 100.0%
Cost of Sales - Housing (2,745,162) (82.3%) (2,782,087) (71.5%)
Gross Margin -
Housing 589,827 17.7% 1,108,169 28.5%
Selling, General &
Administrative (403,446) (12.1%) (515,432) (13.3%)
Housing Operating
Earnings [A] 186,381 5.6% 592,737 15.2%
Revenues - Land Sales &
Other 184,703 90,711
Cost of Sales - Land
Sales & Other (381,850) (100,823)
Gross Margin -
Land Sales & Other (197,147) (10,112)
Other Income (Expense) (6,077) 18,724
Operating Earnings
(Loss) $(16,843) (0.5%) $601,349 15.1%
Attachment 9
Centex Corporation and Subsidiaries
Reconciliation of Housing/Home Building Operating Earnings
(Dollars in thousands)
(unaudited)
Fiscal Year Ended March 31,
2007 2006
HOME BUILDING
Revenues - Housing $11,014,975 100.0% $11,920,634 100.0%
Cost of Sales - Housing (8,599,465) (78.1%) (8,458,995) (71.0%)
Gross Margin -
Housing 2,415,510 21.9% 3,461,639 29.0%
Selling, General &
Administrative (1,631,533) (14.8%) (1,696,456) (14.2%)
Housing Operating
Earnings [A] 783,977 7.1% 1,765,183 14.8%
Revenues - Land Sales &
Other 399,852 351,569
Cost of Sales - Land
Sales & Other (1,044,455) (296,938)
Gross Margin -
Land Sales & Other (644,603) 54,631
Other Income (Expense) (42,553) 85,998
Operating Earnings
(Loss) $96,821 0.8% $1,905,812 15.5%
[A] 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.
SOURCE Centex Corporation