Mr. Hirsch: Centex is on a March 31 fiscal year. We'll have revenues this year of about 5 billion. The Street estimates that earnings will be 225 million after tax. Centex is comprised of a number of business lines. The largest and certainly best known is our home building operation. In the last 25 years we've been among the top ten homebuilders in the country in each of those years. We will be building about 14,000 homes during this year. Home-building earnings represents about 55% of our total earnings. The rest of our earnings are from a combination of our financial services division which comprises both a conventional mortgage business that will do about 9 billion of mortgages this fiscal year and a home equity lending business (that we've been in for the last three or four years) which will do about 1 billion of loan production. We're also involved in the construction products business. We own 59% of a separately traded public company called Centex Construction products, which is principally a cement and wallboard manufacturer. We have an investment real estate division and a substantial general contracting business. Some of our newer business lines include a manufactured housing division and a home services which comprises pest control, security, and lawn care services. Finally, recently we've established offices in London and in Mexico City for the purposes of pursuing European and Latin American operations, respectively.
TWST: Do you have the size and growth potential of the industries market
you serve?
Mr. Hirsch: Home-building, of course, is controlled by more
macroeconomic factors. We are pretty much across the country. Our
lowest concentration right now is in the northeastern portion of the
United States. However, we just completed the acquisition of Calton
Homes in New Jersey which will increase our participation in that
market. We're subject to how many new houses are completed this year in
the country. Of course, the mortgage business reacts or is related to
the new housing business. We have seen a significant expansion of that
business in the last 12 months because of low interest rates which have
generated a re-financing boom. Our other businesses are somewhat less
cyclical or have different cycles. Those businesses have in fact been
added and are being promoted because of two fundamental strategic
initiatives we have under way at Centex. One is to increase our business
base into businesses that are less cyclical, less related to the housing
cycle. Secondly, to broaden our participation into businesses that are
subject to other cycles, internationally and nationally, which will
provide us with a more diverse set of investment opportunities so that
we can continue our philosophy of investing in the down portion of
various cycles.
Tickers included in this excerpt: CTX
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