##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO 13 OR 15(d)OF THE SECURITIES
EXCHANGE ACT OF 1934For The Quarterly Period Ended September 30, 2005
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
SECURITIES EXCHANGE ACT OF 1934For The Transition Period
From          to
 Commission File Number: 1-6776
 CENTEX CORPORATION
 (Exact name of registrant as specified in its charter)
 Nevada
(State of incorporation)
75-0778259
(I.R.S. Employer Identification No.)
 2728 N. Harwood, Dallas, Texas 75201
(Address of principal executive offices)(Zip Code)
(214) 981-5000
(Registrants telephone number, including area code)
 ü
 ü
 ü




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Centex Corporation and Subsidiaries
 Form 10-Q Table of Contents
 September 30, 2005
  
 PART I  FINANCIAL INFORMATIONItem 1.
    
    Financial Statements
    
    
    1Statements of Consolidated Earnings
    
    
    1Consolidated Balance Sheets with Consolidating Details
    
    
    3Statements of Consolidated Cash Flows with Consolidating Details
    
    
    5Notes to Consolidated Financial Statements
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    24Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    47Item 4.
    
    Controls and Procedures
    
    
    47PART II  OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    47Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    48Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    48Item 5.
    
    Other Information
    
    
    49Item 6.
    
    Exhibits
    
    
    50Signatures
    
    
    
    
    51Form of Deferred Compensation AgreementComputation of Ratio of Earnings to Fixed ChargesCertification of CEO Pursuant to Rules 13a-14 and 15d-14Certification of CFO Pursuant to Rules 13a-14 and 15d-14Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 Centex Corporation and Subsidiaries
Statements of Consolidated Earnings
 For the Three Months Ended September 30,2005
    
    
    2004RevenuesHome Building
    
    $
    2,888,409
    
    
    $
    2,131,577Financial Services
    
    
    326,232
    
    
    
    276,923Construction Services
    
    
    391,922
    
    
    
    452,228Other, including Intersegment Eliminations
    
    
    23,167
    
    
    
    24,2963,629,730
    
    
    
    2,885,024Costs and ExpensesHome Building
    
    
    2,435,731
    
    
    
    1,851,702Financial Services
    
    
    272,501
    
    
    
    223,671Construction Services
    
    
    388,064
    
    
    
    447,310Other, including Intersegment Eliminations
    
    
    26,054
    
    
    
    26,598Corporate General and Administrative
    
    
    23,558
    
    
    
    19,019Interest Expense
    
    
    3,072
    
    
    
    4,7113,148,980
    
    
    
    2,573,011Earnings from Unconsolidated Entities
    
    
    6,130
    
    
    
    3,886Earnings from Continuing Operations Before
Income Taxes
    
    
    486,880
    
    
    
    315,899Income Taxes
    
    
    152,065
    
    
    
    112,540Earnings from Continuing Operations
    
    
    334,815
    
    
    
    203,359Earnings (Loss) from Discontinued Operations,
net of Taxes of $17,130 and $5,364
    
    
    (285
    )
    
    
    7,253Net Earnings
    
    $
    334,530
    
    
    $
    210,612Basic Earnings Per ShareContinuing Operations
    
    $
    2.60
    
    
    $
    1.64Discontinued Operations
    
    
    
    
    
    
    0.06$
    2.60
    
    
    $
    1.70Diluted Earnings Per ShareContinuing Operations
    
    $
    2.49
    
    
    $
    1.55Discontinued Operations
    
    
    
    
    
    
    0.06$
    2.49
    
    
    $
    1.61Average Shares OutstandingBasic
    
    
    128,565,026
    
    
    
    124,036,791Dilutive Securities:Options
    
    
    5,714,941
    
    
    
    6,732,011Other
    
    
    246,969
    
    
    
    212,342Diluted
    
    
    134,526,936
    
    
    
    130,981,144Cash Dividends Per Share
    
    $
    0.04
    
    
    $
    0.04
 See Notes to Consolidated Financial Statements.
 1




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##### Table of Contents



Centex Corporation and Subsidiaries
Statements of Consolidated Earnings
 For the Six Months Ended September 30,2005
    
    
    2004RevenuesHome Building
    
    $
    5,287,586
    
    
    $
    4,030,673Financial Services
    
    
    630,068
    
    
    
    551,244Construction Services
    
    
    757,977
    
    
    
    886,445Other, including Intersegment Eliminations
    
    
    47,857
    
    
    
    83,7176,723,488
    
    
    
    5,552,079Costs and ExpensesHome Building
    
    
    4,506,418
    
    
    
    3,534,981Financial Services
    
    
    528,607
    
    
    
    440,418Construction Services
    
    
    751,507
    
    
    
    877,515Other, including Intersegment Eliminations
    
    
    53,505
    
    
    
    78,677Corporate General and Administrative
    
    
    44,160
    
    
    
    38,604Interest Expense
    
    
    5,696
    
    
    
    9,1175,889,893
    
    
    
    4,979,312Earnings from Unconsolidated Entities
    
    
    18,628
    
    
    
    12,112Earnings from Continuing Operations Before
Income Taxes
    
    
    852,223
    
    
    
    584,879Income Taxes
    
    
    290,251
    
    
    
    209,673Earnings from Continuing Operations
    
    
    561,972
    
    
    
    375,206Earnings from Discontinued Operations,
net of Taxes of $19,723 and $6,890
    
    
    6,228
    
    
    
    12,639Net Earnings
    
    $
    568,200
    
    
    $
    387,845Basic Earnings Per ShareContinuing Operations
    
    $
    4.37
    
    
    $
    3.03Discontinued Operations
    
    
    0.05
    
    
    
    0.10$
    4.42
    
    
    $
    3.13Diluted Earnings Per ShareContinuing Operations
    
    $
    4.17
    
    
    $
    2.86Discontinued Operations
    
    
    0.05
    
    
    
    0.10$
    4.22
    
    
    $
    2.96Average Shares OutstandingBasic
    
    
    128,618,235
    
    
    
    123,806,272Dilutive Securities:Options
    
    
    5,714,903
    
    
    
    6,921,348Other
    
    
    392,516
    
    
    
    394,950Diluted
    
    
    134,725,654
    
    
    
    131,122,570Cash Dividends Per Share
    
    $
    0.08
    
    
    $
    0.08
 See Notes to Consolidated Financial Statements.
 2




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##### Table of Contents



Centex Corporation and Subsidiaries
Consolidated Balance Sheets with Consolidating Details
 Centex Corporation and SubsidiariesSeptember 30, 2005
    
    
    March 31, 2005AssetsCash and Cash Equivalents
    
    $
    254,000
    
    
    $
    502,586Restricted Cash
    
    
    472,671
    
    
    
    377,789Receivables -Residential Mortgage Loans Held for Investment, net
    
    
    8,536,728
    
    
    
    7,914,426Residential Mortgage Loans Held for Sale
    
    
    2,013,955
    
    
    
    1,775,324Construction Contracts
    
    
    322,326
    
    
    
    302,035Trade, including Notes of $34,057 and $57,071
    
    
    424,276
    
    
    
    490,199Inventories -Housing Projects
    
    
    7,689,927
    
    
    
    6,234,005Land Held for Development and Sale
    
    
    280,153
    
    
    
    205,190Land Held Under Option Agreements Not Owned
    
    
    699,191
    
    
    
    456,917Other
    
    
    8,579
    
    
    
    33,439Investments -Joint Ventures and Other
    
    
    283,891
    
    
    
    163,944Financial Services
    
    
    
    
    
    
    Property and Equipment, net
    
    
    162,857
    
    
    
    159,722Other Assets -Deferred Income Taxes
    
    
    346,093
    
    
    
    180,127Goodwill
    
    
    217,413
    
    
    
    216,537Mortgage Securitization Residual Interest
    
    
    64,823
    
    
    
    70,120Deferred Charges and Other, net
    
    
    286,236
    
    
    
    251,459Assets of Discontinued Operations
    
    
    
    
    
    
    677,260$
    22,063,119
    
    
    $
    20,011,079Liabilities and Stockholders EquityAccounts Payable
    
    $
    793,165
    
    
    $
    590,276Accrued Liabilities
    
    
    1,483,107
    
    
    
    1,519,390Debt -Centex
    
    
    3,738,981
    
    
    
    3,107,917Financial Services
    
    
    10,644,828
    
    
    
    9,721,146Payables to (Receivables from) Affiliates
    
    
    
    
    
    
    Liabilities of Discontinued Operations
    
    
    
    
    
    
    334,072Commitments and ContingenciesMinority Interests
    
    
    670,996
    
    
    
    457,521Stockholders Equity -Preferred Stock: Authorized 5,000,000 Shares, None
Issued
    
    
    
    
    
    
    Common Stock: $.25 Par Value; Authorized 300,000,000
Shares; Outstanding 127,730,446 and 127,729,725
Shares
    
    
    33,728
    
    
    
    33,327Capital in Excess of Par Value
    
    
    484,270
    
    
    
    407,995Unamortized Value of Deferred Compensation
    
    
    (98
    )
    
    
    (197
    )Retained Earnings
    
    
    4,540,235
    
    
    
    3,982,306Treasury Stock, at Cost; 7,182,005 and 5,577,686 Shares
    
    
    (334,096
    )
    
    
    (213,801
    )Accumulated Other Comprehensive Income
    
    
    8,003
    
    
    
    71,127Total Stockholders Equity
    
    
    4,732,042
    
    
    
    4,280,757$
    22,063,119
    
    
    $
    20,011,079
 See Notes to Consolidated Financial Statements.
 3




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##### Table of Contents



Centex Corporation and Subsidiaries
Consolidated Balance Sheets with Consolidating Details
 Centex*
    
    
    
    
    Financial ServicesSeptember 30, 2005
    
    
    March 31, 2005
    
    
    
    
    September 30, 2005
    
    
    March 31, 2005$
    241,445
    
    
    $
    490,308
    
    
    
    
    $
    12,555
    
    
    $
    12,27850,332
    
    
    
    53,339
    
    
    
    
    
    422,339
    
    
    
    324,450
    
    
    
    
    
    
    
    
    
    8,536,728
    
    
    
    7,914,426
    
    
    
    
    
    
    
    
    
    2,013,955
    
    
    
    1,775,324322,326
    
    
    
    302,035
    
    
    
    
    
    
    
    
    
    224,257
    
    
    
    292,630
    
    
    
    
    
    200,019
    
    
    
    197,5697,689,927
    
    
    
    6,234,005
    
    
    
    
    
    
    
    
    
    280,153
    
    
    
    205,190
    
    
    
    
    
    
    
    
    
    699,191
    
    
    
    456,917
    
    
    
    
    
    
    
    
    
    3,984
    
    
    
    27,133
    
    
    
    
    
    4,595
    
    
    
    6,306283,891
    
    
    
    163,944
    
    
    
    
    
    
    
    
    
    745,003
    
    
    
    572,290
    
    
    
    
    
    
    
    
    
    119,875
    
    
    
    116,487
    
    
    
    
    
    42,982
    
    
    
    43,235188,503
    
    
    
    161,055
    
    
    
    
    
    157,590
    
    
    
    19,072205,676
    
    
    
    204,800
    
    
    
    
    
    11,737
    
    
    
    11,737
    
    
    
    
    
    
    
    
    
    64,823
    
    
    
    70,120210,678
    
    
    
    172,100
    
    
    
    
    
    75,558
    
    
    
    79,359
    
    
    
    677,260
    
    
    
    
    
    
    
    
    
    $
    11,265,241
    
    
    $
    10,129,493
    
    
    
    
    $
    11,542,881
    
    
    $
    10,453,876$
    780,366
    
    
    $
    569,100
    
    
    
    
    $
    12,799
    
    
    $
    21,1761,344,466
    
    
    
    1,381,488
    
    
    
    
    
    138,641
    
    
    
    137,9023,738,981
    
    
    
    3,107,917
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,644,828
    
    
    
    9,721,146
    
    
    
    
    
    
    
    
    
    96,464
    
    
    
    (44,958
    )
    
    
    
    334,072
    
    
    
    
    
    
    
    
    
    669,386
    
    
    
    456,159
    
    
    
    
    
    1,610
    
    
    
    1,362
    
    
    
    
    
    
    
    
    
    
    33,728
    
    
    
    33,327
    
    
    
    
    
    1
    
    
    
    1484,270
    
    
    
    407,995
    
    
    
    
    
    275,467
    
    
    
    275,467(98
    )
    
    
    (197
    )
    
    
    
    
    
    
    
    
    4,540,235
    
    
    
    3,982,306
    
    
    
    
    
    364,887
    
    
    
    333,568(334,096
    )
    
    
    (213,801
    )
    
    
    
    
    
    
    
    
    8,003
    
    
    
    71,127
    
    
    
    
    
    8,184
    
    
    
    8,2124,732,042
    
    
    
    4,280,757
    
    
    
    
    
    648,539
    
    
    
    617,248$
    11,265,241
    
    
    $
    10,129,493
    
    
    
    
    $
    11,542,881
    
    
    $
    10,453,876
 *
    
    In the supplemental data presented above, Centex represents the consolidation of all
subsidiaries other than those included in Financial Services. Transactions between Centex
and Financial Services have been eliminated from the Centex Corporation and Subsidiaries
balance sheets.
 4




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##### Table of Contents



Centex Corporation and Subsidiaries
Statements of Consolidated Cash Flows with Consolidating Details
 Centex Corporation and SubsidiariesFor the Six Months Ended September 30,2005
    
    
    2004Cash Flows  Operating ActivitiesNet Earnings
    
    $
    568,200
    
    
    $
    387,845Adjustments-Depreciation and Amortization
    
    
    33,880
    
    
    
    28,396Stock-based Compensation
    
    
    34,492
    
    
    
    23,964Provision for Losses on Residential Mortgage Loans
Held for Investment
    
    
    49,035
    
    
    
    51,084Deferred Income Tax Benefit
    
    
    (164,506
    )
    
    
    (11,361
    )Undistributed Earnings of Joint Ventures
    
    
    (6,214
    )
    
    
    8,726Undistributed Earnings of Financial Services
    
    
    
    
    
    
    Minority Interest, net of Taxes
    
    
    (299
    )
    
    
    1,229Gain on Sale of Discontinued Operations
    
    
    (10,740
    )
    
    
    Changes in Assets and Liabilities, Excluding Effect of Dispositions
(Increase) Decrease in Restricted Cash
    
    
    (94,882
    )
    
    
    (16,141
    )Decrease (Increase) in Receivables
    
    
    23,121
    
    
    
    (55,811
    )Decrease (Increase) in Residential Mortgage Loans Held for Sale
    
    
    (238,631
    )
    
    
    253,315Increase in Housing Projects and Land Held for Development and Sale
    
    
    (1,543,671
    )
    
    
    (977,952
    )Decrease (Increase) in Other Inventories
    
    
    1,654
    
    
    
    40,665Increase (Decrease) in Accounts Payable and Accrued Liabilities
    
    
    122,806
    
    
    
    2,913(Increase) Decrease in Other Assets, net
    
    
    (36,418
    )
    
    
    24,695Increase (Decrease) in Payables to Affiliates
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    (3,231
    )(1,262,173
    )
    
    
    (241,664
    )Cash Flows  Investing ActivitiesPayment (Issuance) on Notes Receivable, net
    
    
    23,014
    
    
    
    (2,591
    )Increase in Residential Mortgage Loans Held for Investment
    
    
    (671,337
    )
    
    
    (732,773
    )Investments in and Advances to Joint Ventures
    
    
    (198,534
    )
    
    
    (104,022
    )Distributions from Joint Ventures
    
    
    85,214
    
    
    
    66,646(Increase) Decrease in Investment and Advances to Financial Services
    
    
    
    
    
    
    Purchases of Property and Equipment, net
    
    
    (31,006
    )
    
    
    (25,031
    )Proceeds from Dispositions
    
    
    331,388
    
    
    
    9,267Other
    
    
    (1,387
    )
    
    
    (596
    )(462,648
    )
    
    
    (789,100
    )Cash Flows  Financing ActivitiesIncrease (Decrease) in Short-term Debt, net
    
    
    1,586,440
    
    
    
    94,086CentexIssuance of Long-term Debt
    
    
    971,874
    
    
    
    392,902Repayment of Long-term Debt
    
    
    (301,151
    )
    
    
    (10,648
    )Financial ServicesIssuance of Long-term Debt
    
    
    1,055,206
    
    
    
    1,867,799Repayment of Long-term Debt
    
    
    (1,722,150
    )
    
    
    (1,421,116
    )Proceeds from Stock Option Exercises
    
    
    18,061
    
    
    
    14,669Treasury Stock Transactions, net
    
    
    (120,295
    )
    
    
    88Dividends Paid
    
    
    (10,271
    )
    
    
    (9,874
    )1,477,714
    
    
    
    927,906Effect of Exchange Rate on Cash
    
    
    (1,479
    )
    
    
    45Net (Decrease) Increase in Cash and Cash Equivalents
    
    
    (248,586
    )
    
    
    (102,813
    )Cash and Cash Equivalents at Beginning of Period(1)
    
    
    502,586
    
    
    
    178,859Cash and Cash Equivalents at End of Period(2)
    
    $
    254,000
    
    
    $
    76,046
 See Notes to Consolidated Financial Statements.
 (1)
    
    Amount includes cash and cash equivalents of discontinued operation of $199 for the six
months ended September 30, 2004.(2)
    
    Amount includes cash and cash equivalents of discontinued operation of $1 for the six months
ended September 30, 2004.
 5




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##### Table of Contents



Centex Corporation and Subsidiaries
Statements of Consolidated Cash Flows with Consolidating Details
 Centex *
    
    
    
    
    Financial ServicesFor the Six Months Ended September 30,
    
    
    
    
    For the Six Months Ended September 30,2005
    
    
    2004
    
    
    
    
    2005
    
    
    2004$
    568,200
    
    
    $
    387,845
    
    
    
    
    $
    56,319
    
    
    $
    68,96124,940
    
    
    
    19,513
    
    
    
    
    
    8,940
    
    
    
    8,88334,492
    
    
    
    23,964
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49,035
    
    
    
    51,084(25,351
    )
    
    
    (1,949
    )
    
    
    
    
    (139,155
    )
    
    
    (9,412
    )(6,214
    )
    
    
    8,726
    
    
    
    
    
    
    
    
    
    (31,319
    )
    
    
    (46,961
    )
    
    
    
    
    
    
    
    
    (547
    )
    
    
    1,182
    
    
    
    
    
    248
    
    
    
    47(10,740
    )
    
    
    
    
    
    
    
    
    
    
    
    
    3,007
    
    
    
    (281
    )
    
    
    
    
    (97,889
    )
    
    
    (15,860
    )25,686
    
    
    
    (39,328
    )
    
    
    
    
    (2,565
    )
    
    
    (16,483
    )
    
    
    
    
    
    
    
    
    
    (238,631
    )
    
    
    253,315(1,543,671
    )
    
    
    (977,952
    )
    
    
    
    
    
    
    
    
    (57
    )
    
    
    38,471
    
    
    
    
    
    1,711
    
    
    
    2,194130,444
    
    
    
    49,736
    
    
    
    
    
    (7,666
    )
    
    
    (41,578
    )(46,153
    )
    
    
    3,994
    
    
    
    
    
    9,735
    
    
    
    20,701
    
    
    
    
    
    
    
    
    
    141,422
    
    
    
    (26,794
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,231
    )(877,283
    )
    
    
    (533,040
    )
    
    
    
    
    (218,496
    )
    
    
    291,82722,899
    
    
    
    (2,610
    )
    
    
    
    
    115
    
    
    
    19
    
    
    
    
    
    
    
    
    
    (671,337
    )
    
    
    (732,773
    )(198,534
    )
    
    
    (104,022
    )
    
    
    
    
    
    
    
    
    85,214
    
    
    
    66,646
    
    
    
    
    
    
    
    
    
    (141,394
    )
    
    
    21,549
    
    
    
    
    
    
    
    
    
    (22,319
    )
    
    
    (9,459
    )
    
    
    
    
    (8,687
    )
    
    
    (15,572
    )331,388
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,267(1,387
    )
    
    
    (596
    )
    
    
    
    
    
    
    
    
    75,867
    
    
    
    (28,492
    )
    
    
    
    
    (679,909
    )
    
    
    (739,059
    )(4,186
    )
    
    
    76,691
    
    
    
    
    
    1,590,626
    
    
    
    17,395971,874
    
    
    
    392,902
    
    
    
    
    
    
    
    
    
    (301,151
    )
    
    
    (10,648
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,055,206
    
    
    
    1,867,799
    
    
    
    
    
    
    
    
    
    (1,722,150
    )
    
    
    (1,421,116
    )18,061
    
    
    
    14,669
    
    
    
    
    
    
    
    
    
    (120,295
    )
    
    
    88
    
    
    
    
    
    
    
    
    
    (10,271
    )
    
    
    (9,874
    )
    
    
    
    
    (25,000
    )
    
    
    (22,000
    )554,032
    
    
    
    463,828
    
    
    
    
    
    898,682
    
    
    
    442,078(1,479
    )
    
    
    45
    
    
    
    
    
    
    
    
    
    (248,863
    )
    
    
    (97,659
    )
    
    
    
    
    277
    
    
    
    (5,154
    )490,308
    
    
    
    160,590
    
    
    
    
    
    12,278
    
    
    
    18,269$
    241,445
    
    
    $
    62,931
    
    
    
    
    $
    12,555
    
    
    $
    13,115
 *
    
    In the supplemental data presented above, Centex represents the consolidation of all
subsidiaries other than those included in Financial Services. Transactions between Centex and
Financial Services have been eliminated from the Centex Corporation and Subsidiaries statements of
consolidated cash flows.
 6




---



##### Table of Contents



Centex Corporation and Subsidiaries
Notes to Consolidated Financial Statements
September 30, 2005
 (A) BASIS OF PRESENTATION
   (B) STATEMENTS OF CONSOLIDATED CASH FLOWS  SUPPLEMENTAL DISCLOSURES
  For the Three Months
    
    
    For the Six MonthsEnded September 30,
    
    
    Ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Cash Paid for Interest
    
    $
    158,949
    
    
    $
    119,309
    
    
    $
    300,429
    
    
    $
    210,502Net Cash Paid for Taxes
    
    $
    254,474
    
    
    $
    166,277
    
    
    $
    426,030
    
    
    $
    174,894
  For the Three Months
    
    
    For the Six MonthsEnded September 30,
    
    
    Ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Total Interest Incurred
    
    $
    167,083
    
    
    $
    115,480
    
    
    $
    313,994
    
    
    $
    221,339Less  Interest Capitalized
    
    
    (56,360
    )
    
    
    (42,253
    )
    
    
    (106,210
    )
    
    
    (82,058
    )Financial Services Interest Expense
    
    
    (107,651
    )
    
    
    (68,516
    )
    
    
    (202,088
    )
    
    
    (130,164
    )Interest Expense, net
    
    $
    3,072
    
    
    $
    4,711
    
    
    $
    5,696
    
    
    $
    9,117Capitalized Interest Relieved to Home
Buildings Costs and Expenses
    
    $
    40,533
    
    
    $
    31,593
    
    
    $
    75,093
    
    
    $
    57,845
 7




---



##### Table of Contents



Sales Proceeds
    
    $
    322,690Assets Sold
    
    
    (632,956
    )Liabilities
Assumed by Buyer
    
    
    119,218Long-term
Debt Assumed by Buyer
    
    
    153,434Foreign Currency Gain
    
    
    48,354Pre-tax Gain on Sale
    
    
    10,740Income Tax Expense
    
    
    (16,495
    )Net Loss on Sale
    
    $
    (5,755
    )
   (C) STOCK-BASED COMPENSATION ARRANGEMENTS
     8




---



##### Table of Contents



(D) STOCKHOLDERS EQUITY
  Unamortized
    
    
    
    
    
    
    
    
    
    
    AccumulatedCapital in
    
    
    Value of
    
    
    
    
    
    
    Treasury
    
    
    OtherCommon Stock
    
    
    Excess of
    
    
    Deferred
    
    
    Retained
    
    
    Stock,
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Par Value
    
    
    Compensation
    
    
    Earnings
    
    
    at Cost
    
    
    Income (Loss)
    
    
    TotalBalance, March 31, 2005
    
    
    127,729
    
    
    $
    33,327
    
    
    $
    407,995
    
    
    $
    (197
    )
    
    $
    3,982,306
    
    
    $
    (213,801
    )
    
    $
    71,127
    
    
    $
    4,280,757Issuance of Restricted
Stock
    
    
    249
    
    
    
    62
    
    
    
    (62
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock Compensation
    
    
    
    
    
    
    
    
    
    
    34,393
    
    
    
    99
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    34,492Exercise of Stock
Options, Including
Tax Benefits
    
    
    1,355
    
    
    
    339
    
    
    
    48,158
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48,497Cash Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,271
    )
    
    
    
    
    
    
    
    
    
    
    (10,271
    )Purchase of Common
Stock for Treasury
    
    
    (1,771
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (122,761
    )
    
    
    
    
    
    
    (122,761
    )Other Stock
Transactions
    
    
    168
    
    
    
    
    
    
    
    (6,214
    )
    
    
    
    
    
    
    
    
    
    
    2,466
    
    
    
    
    
    
    
    (3,748
    )Net Earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    568,200
    
    
    
    
    
    
    
    
    
    
    
    568,200Unrealized Losson HedgingInstruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (377
    )
    
    
    (377
    )Foreign Currency
Translation
Adjustments (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (62,747
    )
    
    
    (62,747
    )Balance, September 30, 2005
    
    
    127,730
    
    
    $
    33,728
    
    
    $
    484,270
    
    
    $
    (98
    )
    
    $
    4,540,235
    
    
    $
    (334,096
    )
    
    $
    8,003
    
    
    $
    4,732,042
 (1)
    
    Amount includes a reclassification adjustment of $48,354 for foreign currency
gain included in net earnings.
 (E) RESIDENTIAL MORTGAGE LOANS HELD FOR INVESTMENT
  September 30, 2005
    
    
    March 31, 2005Residential Mortgage Loans Held for Investment
    
    $
    8,627,067
    
    
    $
    7,999,728Allowance for Losses on Residential Mortgage Loans
Held for Investment
    
    
    (90,339
    )
    
    
    (85,302
    )Residential Mortgage Loans Held for Investment,
net of Allowance for Losses
    
    $
    8,536,728
    
    
    $
    7,914,426
  For the Six Months Ended
    
    
    For the Year EndedSeptember 30, 2005
    
    
    March 31, 2005Balance at Beginning of Period
    
    $
    85,302
    
    
    $
    56,358Provision for Losses
    
    
    49,035
    
    
    
    98,801Losses Sustained, net of Recoveries of
$733 and $1,226
    
    
    (43,998
    )
    
    
    (69,857
    )Balance at End of Period
    
    $
    90,339
    
    
    $
    85,302
 9




---



##### Table of Contents



September 30, 2005
    
    
    March 31, 2005Allowance as a Percentage of Gross Loans
Held for Investment
    
    
    1.1
    %
    
    
    1.1
    %Allowance as a Percentage of 90+ Days
Contractual Delinquency
    
    
    41.6
    %
    
    
    44.2
    %90+ Days Contractual Delinquency
(based on months)
Total Dollars Delinquent
    
    $
    217,010
    
    
    $
    192,835% Delinquent
    
    
    2.5
    %
    
    
    2.4
    %
 (F) GOODWILL
  ConstructionHome Building
    
    
    Financial Services
    
    
    Services
    
    
    Other
    
    
    TotalBalance as of March 31, 2005
    
    $
    121,501
    
    
    $
    11,737
    
    
    $
    1,007
    
    
    $
    82,292
    
    
    $
    216,537Goodwill Acquired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    876
    
    
    
    876Balance as of September 30,
2005
    
    $
    121,501
    
    
    $
    11,737
    
    
    $
    1,007
    
    
    $
    83,168
    
    
    $
    217,413
  10




---



##### Table of Contents



(G) INDEBTEDNESS
  September 30,
    
    
    March 31,2005
    
    
    2005Weighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    AverageInterest
    
    
    
    
    
    
    InterestRate
    
    
    
    
    
    
    RateShort-term Debt:Centex
    
    $
    3,684
    
    
    
    0.68
    %
    
    $
    7,870
    
    
    
    1.72
    %Financial Services

Financial Institutions
    
    
    352,543
    
    
    
    4.08
    %
    
    
    190,779
    
    
    
    3.12
    %Medium-term Notes:Harwood Street Funding I, LLC
    
    
    
    
    
    
    
    %
    
    
    250,000
    
    
    
    2.90
    %Harwood Street Funding II, LLC
    
    
    200,000
    
    
    
    3.91
    %
    
    
    
    
    
    
    
    %Secured Liquidity Notes:Harwood Street Funding I, LLC
    
    
    1,590,422
    
    
    
    3.87
    %
    
    
    1,195,076
    
    
    
    2.89
    %Harwood Street Funding II, LLC
    
    
    1,915,537
    
    
    
    3.86
    %
    
    
    832,021
    
    
    
    2.99
    %Consolidated Short-term Debt
    
    
    4,062,186
    
    
    
    
    
    
    
    2,475,746Long-term Debt:Centex
Medium-term Note Programs, due through 2008
    
    
    398,000
    
    
    
    5.30
    %
    
    
    398,000
    
    
    
    4.59
    %Senior Notes, due through 2016
    
    
    3,208,654
    
    
    
    5.79
    %
    
    
    2,458,547
    
    
    
    6.32
    %Other Indebtedness, due through 2015
    
    
    28,766
    
    
    
    5.11
    %
    
    
    43,670
    
    
    
    5.57
    %Subordinated Debt:Subordinated Debentures, due in 2007
    
    
    99,877
    
    
    
    8.75
    %
    
    
    99,838
    
    
    
    8.75
    %Subordinated Debentures, due in 2006
    
    
    
    
    
    
    
    %
    
    
    99,992
    
    
    
    7.38
    %3,735,297
    
    
    
    
    
    
    
    3,100,047Financial Services

Home Equity Asset-Backed Certificates,
due through 2036
    
    
    6,376,326
    
    
    
    4.33
    %
    
    
    7,099,520
    
    
    
    3.63
    %Harwood Street Funding I, LLC Variable Rate
Subordinated Extendable Certificates,
due through 2010
    
    
    60,000
    
    
    
    5.86
    %
    
    
    60,000
    
    
    
    4.87
    %Harwood Street Funding II, LLC Variable
Rate Subordinated Notes, due through 2011
    
    
    150,000
    
    
    
    5.72
    %
    
    
    93,750
    
    
    
    5.02
    %6,586,326
    
    
    
    
    
    
    
    7,253,270Consolidated Long-term Debt
    
    
    10,321,623
    
    
    
    
    
    
    
    10,353,317Total Debt
    
    $
    14,383,809
    
    
    
    
    
    
    $
    12,829,063
  11




---



##### Table of Contents



For the Six Months Ended September 30,2005
    
    
    2004Short-term Debt:Centex
    
    
    3.51
    %
    
    
    1.41
    %Financial Services
    
    
    3.60
    %
    
    
    1.73
    %Long-term Debt:CentexMedium-term Note Programs (1)
    
    
    5.28
    %
    
    
    5.39
    %Senior Notes
    
    
    6.00
    %
    
    
    6.58
    %Other Indebtedness
    
    
    5.31
    %
    
    
    5.01
    %Subordinated Debentures
    
    
    8.39
    %
    
    
    8.05
    %Financial ServicesCentex Home Equity Company, LLC Long-term Debt (2)
    
    
    4.37
    %
    
    
    3.23
    %CTX Mortgage Company, LLC Long-term Debt (3)
    
    
    5.33
    %
    
    
    3.34
    %
 (1)
    
    Interest rates include the effects of an interest rate swap
agreement.(2)
    
    Consists of Centex Home Equity Company, LLC Asset-Backed
Certificates and Harwood Street Funding II, LLC Variable Rate
Subordinated Notes.(3)
    
    Consists of Harwood Street Funding I, LLC Variable Rate
Subordinated Extendable Certificates.
  Centex
    
    
    Financial Services
    
    
    Total2006
    
    $
    41,540
    
    
    $
    1,895,726
    
    
    $
    1,937,2662007
    
    
    292,185
    
    
    
    2,502,490
    
    
    
    2,794,6752008
    
    
    527,307
    
    
    
    961,053
    
    
    
    1,488,3602009
    
    
    150,129
    
    
    
    479,850
    
    
    
    629,9792010
    
    
    225,072
    
    
    
    670,311
    
    
    
    895,383Thereafter
    
    
    2,499,064
    
    
    
    76,896
    
    
    
    2,575,960$
    3,735,297
    
    
    $
    6,586,326
    
    
    $
    10,321,623
   12




---



##### Table of Contents



Credit Facilities
  Existing Credit
    
    
    AvailableFacilities
    
    
    CapacityCentexMulti-Bank Revolving Credit FacilityRevolving Credit
    
    $
    1,000,000
    
    
    $
    1,000,000Letters of Credit
    
    
    500,000
    
    
    
    157,6451,500,000
    
    
    
    1,157,645
    (1) (2)Financial ServicesMortgage Servicer Advance Facility
    
    
    100,000
    
    
    
    81,871
    (3)Secured Credit Facilities
    
    
    614,000
    
    
    
    279,585
    (4)Harwood Street Funding I, LLC Facility
    
    
    3,000,000
    
    
    
    1,348,070Harwood Street Funding II, LLC Facility
    
    
    4,000,000
    
    
    
    1,734,4637,714,000
    
    
    
    3,443,989$
    9,214,000
    
    
    $
    4,601,634
 (1)
    
    This is an unsecured, committed, multi-bank revolving credit facility, maturing in July
2010, which serves as backup for the Companys $900 million commercial paper program and
provides $500 million of letter of credit capacity. There have been no direct borrowings
under this revolving credit facility since its inception.(2)
    
    In conjunction with the issuance of surety bonds in support of Construction Services
activity, Centex Corporation has agreed to provide letters of credit of up to $100 million if
Centex Corporations public debt ratings fall below investment grade. In support of this
ratings trigger, the Company maintains a minimum of $100 million in unused committed credit
at all times.(3)
    
    Under this facility, Home Equity is permitted to securitize its mortgage servicer advances in
an amount up to $100 million with a final maturity of May 2011. This facility has no recourse
to Centex Corporation.(4)
    
    CTX Mortgage Company, LLC and its related companies and Home Equity share in a $300 million
secured, committed credit facility to finance mortgage inventory. CTX Mortgage Company, LLC
and its related companies also maintain $314 million of secured, committed mortgage warehouse
facilities to finance mortgages. These facilities were increased to $390 million in October
2005.
 CTX Mortgage Company, LLC and Harwood Street Funding I, LLC
   13




---



##### Table of Contents



Centex Home Equity Company, LLC and Harwood Street Funding II, LLC
    14




---



##### Table of Contents



(H) COMMITMENTS AND CONTINGENCIES
      September 30,
    
    
    March 31,2005
    
    
    2005Balance at Beginning of Period
    
    $
    34,961
    
    
    $
    16,683Warranties Issued
    
    
    24,411
    
    
    
    42,591Settlements Made
    
    
    (20,684
    )
    
    
    (31,070
    )Changes in Liability of Pre-Existing
Warranties, Including Expirations
    
    
    
    
    
    
    6,757Balance at End of Period
    
    $
    38,688
    
    
    $
    34,961
 15




---



##### Table of Contents



September 30,
    
    
    March 31,2005
    
    
    2005Balance at Beginning of Period
    
    $
    18,803
    
    
    $
    25,045Provision for Losses
    
    
    1,305
    
    
    
    557Settlements
    
    
    (2,025
    )
    
    
    (6,799
    )Balance at End of Period
    
    $
    18,083
    
    
    $
    18,803
    (I) LAND HELD UNDER OPTION AGREEMENTS NOT OWNED AND OTHER LAND DEPOSITS
  16




---



##### Table of Contents



September 30,
    
    
    March 31,2005
    
    
    2005Cash Deposits included in:Land Held for Development and Sale
    
    $
    197.4
    
    
    $
    141.9Land Held Under Option Agreements Not Owned
    
    
    69.9
    
    
    
    41.5Total Cash Deposits in Inventory
    
    
    267.3
    
    
    
    183.4Letters of Credit
    
    
    33.3
    
    
    
    40.4Total
Invested through Deposits or Secured with Letters of Credit
    
    $
    300.6
    
    
    $
    223.8Total Purchase Price of Land Option Agreements
    
    $
    8,577.8
    
    
    $
    7,340.5
 (J) COMPREHENSIVE INCOME
  For the Three Months
    
    
    For the Six MonthsEnded September 30,
    
    
    Ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Net Earnings
    
    $
    334,530
    
    
    $
    210,612
    
    
    $
    568,200
    
    
    $
    387,845Other Comprehensive Income (Loss), net of Tax:Unrealized Gain (Loss) on Hedging
Instruments
    
    
    5,330
    
    
    
    (9,255
    )
    
    
    (377
    )
    
    
    5,788Foreign Currency Translation Adjustment
    
    
    (710
    )
    
    
    (1,367
    )
    
    
    (14,393
    )
    
    
    (4,117
    )Foreign Currency Gain Reclassified to Net
Earnings
    
    
    (48,354
    )
    
    
    
    
    
    
    (48,354
    )
    
    
    Comprehensive Income
    
    $
    290,796
    
    
    $
    199,990
    
    
    $
    505,076
    
    
    $
    389,516
  (K) BUSINESS SEGMENTS
  17




---



##### Table of Contents



Home Building
   Financial Services
   Construction Services
  18




---



##### Table of Contents



Other
  For the Three Months Ended September 30, 2005(Dollars in millions)Home
    
    
    Financial
    
    
    Construction
    
    
    
    
    
    
    IntersegmentBuilding
    
    
    Services
    
    
    Services
    
    
    Other
    
    
    Eliminations
    
    
    TotalRevenues
    
    $
    2,888.5
    
    
    $
    326.2
    
    
    $
    391.9
    
    
    $
    30.0
    
    
    $
    (6.9
    )
    
    $
    3,629.7Cost of Sales
    
    
    (2,036.1
    )
    
    
    (107.7
    )
    
    
    (368.7
    )
    
    
    (15.0
    )
    
    
    6.6
    
    
    
    (2,520.9
    )Selling, General and
Administrative Expenses
    
    
    (399.8
    )
    
    
    (164.8
    )
    
    
    (19.3
    )
    
    
    (44.1
    )
    
    
    
    
    
    
    (628.0
    )Earnings from
Unconsolidated Entities
    
    
    6.0
    
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    6.1Earnings (Loss)
Before Income Tax
    
    $
    458.6
    
    
    $
    53.7
    
    
    $
    4.0
    
    
    $
    (29.1
    )
    
    $
    (0.3
    )
    
    $
    486.9
 For the Three Months Ended September 30, 2004(Dollars in millions)Home
    
    
    Financial
    
    
    ConstructionBuilding
    
    
    Services
    
    
    Services
    
    
    Other
    
    
    TotalRevenues
    
    $
    2,131.6
    
    
    $
    276.9
    
    
    $
    452.2
    
    
    $
    24.3
    
    
    $
    2,885.0Cost of Sales
    
    
    (1,555.9
    )
    
    
    (68.5
    )
    
    
    (432.3
    )
    
    
    (12.0
    )
    
    
    (2,068.7
    )Selling, General and
Administrative Expenses
    
    
    (295.8
    )
    
    
    (155.2
    )
    
    
    (15.0
    )
    
    
    (38.3
    )
    
    
    (504.3
    )Earnings from
Unconsolidated Entities
    
    
    3.3
    
    
    
    
    
    
    
    0.6
    
    
    
    
    
    
    
    3.9Earnings (Loss)
Before Income Tax
    
    $
    283.2
    
    
    $
    53.2
    
    
    $
    5.5
    
    
    $
    (26.0
    )
    
    $
    315.9
 For the Six Months Ended September 30, 2005(Dollars in millions)Home
    
    
    Financial
    
    
    Construction
    
    
    
    
    
    
    IntersegmentBuilding
    
    
    Services
    
    
    Services
    
    
    Other
    
    
    Eliminations
    
    
    TotalRevenues
    
    $
    5,287.6
    
    
    $
    630.1
    
    
    $
    758.0
    
    
    $
    57.7
    
    
    $
    (9.9
    )
    
    $
    6,723.5Cost of Sales
    
    
    (3,746.8
    )
    
    
    (202.1
    )
    
    
    (713.0
    )
    
    
    (28.8
    )
    
    
    9.5
    
    
    
    (4,681.2
    )Selling, General and
Administrative Expenses
    
    
    (759.7
    )
    
    
    (326.5
    )
    
    
    (38.5
    )
    
    
    (84.0
    )
    
    
    
    
    
    
    (1,208.7
    )Earnings from
Unconsolidated Entities
    
    
    18.4
    
    
    
    
    
    
    
    0.2
    
    
    
    
    
    
    
    
    
    
    
    18.6Earnings (Loss)
Before Income Tax
    
    $
    799.5
    
    
    $
    101.5
    
    
    $
    6.7
    
    
    $
    (55.1
    )
    
    $
    (0.4
    )
    
    $
    852.2
 19




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##### Table of Contents



For the Six Months Ended September 30, 2004(Dollars in millions)Home
    
    
    Financial
    
    
    ConstructionBuilding
    
    
    Services
    
    
    Services
    
    
    Other
    
    
    TotalRevenues
    
    $
    4,030.7
    
    
    $
    551.2
    
    
    $
    886.4
    
    
    $
    83.8
    
    
    $
    5,552.1Cost of Sales
    
    
    (2,952.8
    )
    
    
    (130.1
    )
    
    
    (846.6
    )
    
    
    (48.5
    )
    
    
    (3,978.0
    )Selling, General and
Administrative Expenses
    
    
    (582.2
    )
    
    
    (310.3
    )
    
    
    (30.8
    )
    
    
    (78.0
    )
    
    
    (1,001.3
    )Earnings from
Unconsolidated Entities
    
    
    11.1
    
    
    
    
    
    
    
    1.0
    
    
    
    
    
    
    
    12.1Earnings (Loss)
Before Income Tax
    
    $
    506.8
    
    
    $
    110.8
    
    
    $
    10.0
    
    
    $
    (42.7
    )
    
    $
    584.9
  For the Three Months
    
    
    For the Six MonthsEnded September 30,
    
    
    Ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Operating Loss from Home Services Operations
    
    $
    (2.2
    )
    
    $
    (2.1
    )
    
    $
    (4.8
    )
    
    $
    (4.7
    )Operating Earnings (Loss) from Investment
Real Estate Operations
    
    
    (0.3
    )
    
    
    (0.2
    )
    
    
    (0.4
    )
    
    
    9.7Corporate General and Administrative Expense
    
    
    (23.5
    )
    
    
    (19.0
    )
    
    
    (44.2
    )
    
    
    (38.6
    )Interest Expense
    
    
    (3.1
    )
    
    
    (4.7
    )
    
    
    (5.7
    )
    
    
    (9.1
    )$
    (29.1
    )
    
    $
    (26.0
    )
    
    $
    (55.1
    )
    
    $
    (42.7
    )
 (L) INCOME TAXES
  (M) DERIVATIVES AND HEDGING
  20




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##### Table of Contents



Cash Flow Hedges
  Fixed
    
    
    
    
    
    
    Accumulated OtherNotional Value
    
    
    Interest
    
    
    Termination
    
    
    Comprehensive Income(in millions)
    
    
    Rate
    
    
    Date
    
    
    (Loss)CentexInterest rate swap
    
    $
    25.0
    
    
    
    6.7
    %
    
    October 2005
    
    $
    (122
    )Financial ServicesInterest rate swaps
    
    $
    110.0
    
    
    
    4.2
    % (1)
    
    Through June 2012
    
    
    716Interest rate
swaps
    
    $
    2,396.5
    
    
    
    3.1
    % (1)
    
    Through August 2008
    
    
    13,541$
    14,135
 (1)
    
    Weighted average fixed interest rates.
   Fair Value Hedges
  Other Derivatives
   21




---



##### Table of Contents



(N) RECENT ACCOUNTING PRONOUNCEMENTS
     (O) OFF-BALANCE SHEET OBLIGATIONS
  (P) DISCONTINUED OPERATIONS
  22




---



##### Table of Contents



For the Three Months
    
    
    For the Six MonthsEnded September 30,
    
    
    Ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Revenues
    
    $
    93.9
    
    
    $
    99.9
    
    
    $
    220.8
    
    
    $
    198.9Operating Earnings
    
    
    6.8
    
    
    
    13.2
    
    
    
    16.7
    
    
    
    20.7
  (Q) SUBSEQUENT EVENTS
   (R) RECLASSIFICATIONS
  23




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Executive Summary
  Revenues
 
 Earnings (Loss) from Continuing Operations Before Income Taxes
 
 *
    
    Other consists of the financial results of our investment real estate and home services
operations, as well as corporate general and administrative expense, interest expense and
intersegment eliminations.
    24




---



##### Table of Contents



Revenues
 
 Earnings (Loss) from Continuing Operations Before Income Taxes
 
 *
    
    Other consists of the financial results of our investment real estate and home services
operations, as well as corporate general and administrative expense, interest expense and
intersegment eliminations.
    25




---



##### Table of Contents



26




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##### Table of Contents



HOME BUILDING
     For the Three Months Ended September 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeRevenues  Housing
    
    $
    2,716.0
    
    
    
    32.3
    %
    
    $
    2,053.1
    
    
    
    21.6
    %Revenues  Land Sales and Other
    
    
    172.5
    
    
    
    119.7
    %
    
    
    78.5
    
    
    
    268.5
    %Cost of Sales  Housing
    
    
    (1,922.7
    )
    
    
    28.9
    %
    
    
    (1,491.3
    )
    
    
    21.3
    %Cost of Sales  Land Sales and Other
    
    
    (113.4
    )
    
    
    75.5
    %
    
    
    (64.6
    )
    
    
    112.5
    %Selling, General and Administrative Expenses
    
    
    (399.8
    )
    
    
    35.2
    %
    
    
    (295.8
    )
    
    
    20.8
    %Earnings from Unconsolidated Entities
    
    
    6.0
    
    
    
    81.8
    %
    
    
    3.3
    
    
    
    135.7
    %Operating Earnings
    
    $
    458.6
    
    
    
    61.9
    %
    
    $
    283.2
    
    
    
    37.6
    %Operating Earnings as a Percentage of Revenues
    
    
    15.9
    %
    
    NM
    *
    
    
    13.3
    %
    
    NM*NM = Not meaningful
 For the Six Months Ended September 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeRevenues  Housing
    
    $
    5,074.0
    
    
    
    29.3
    %
    
    $
    3,925.4
    
    
    
    24.0
    %Revenues  Land Sales and Other
    
    
    213.6
    
    
    
    102.8
    %
    
    
    105.3
    
    
    
    117.6
    %Cost of Sales  Housing
    
    
    (3,596.2
    )
    
    
    26.0
    %
    
    
    (2,853.1
    )
    
    
    22.4
    %Cost of Sales  Land Sales and Other
    
    
    (150.6
    )
    
    
    51.1
    %
    
    
    (99.7
    )
    
    
    80.3
    %Selling, General and Administrative Expenses
    
    
    (759.7
    )
    
    
    30.5
    %
    
    
    (582.2
    )
    
    
    24.8
    %Earnings from Unconsolidated Entities
    
    
    18.4
    
    
    
    65.8
    %
    
    
    11.1
    
    
    
    326.9
    %Operating Earnings
    
    $
    799.5
    
    
    
    57.8
    %
    
    $
    506.8
    
    
    
    39.8
    %Operating Earnings as a Percentage of Revenues
    
    
    15.1
    %
    
    NM
    
    
    
    12.6
    %
    
    NM
  
    
    Growth in average neighborhoods
 
    
    Growth in closings per average neighborhood
 
    
    Increases in average unit sales price
 
    
    Operating margin improvement
 27




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##### Table of Contents



For the Three Months Ended September 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeUnits Closed
    
    
    9,157
    
    
    
    16.9
    %
    
    
    7,831
    
    
    
    13.4
    %Average Unit Sales Price
    
    $
    296,593
    
    
    
    13.1
    %
    
    $
    262,181
    
    
    
    7.3
    %Operating Earnings Per Unit
    
    $
    50,086
    
    
    
    38.5
    %
    
    $
    36,159
    
    
    
    21.3
    %Average Operating Neighborhoods
    
    
    615
    
    
    
    6.8
    %
    
    
    576
    
    
    
    3.0
    %Closings Per Average Neighborhood
    
    
    14.9
    
    
    
    9.6
    %
    
    
    13.6
    
    
    
    9.7
    %
 For the Six Months Ended September 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeUnits Closed
    
    
    17,392
    
    
    
    14.3
    %
    
    
    15,214
    
    
    
    14.8
    %Average Unit Sales Price
    
    $
    291,745
    
    
    
    13.1
    %
    
    $
    258,013
    
    
    
    8.0
    %Operating Earnings Per Unit
    
    $
    45,972
    
    
    
    38.0
    %
    
    $
    33,308
    
    
    
    21.8
    %Average Operating Neighborhoods
    
    
    611
    
    
    
    6.6
    %
    
    
    573
    
    
    
    2.7
    %Closings Per Average Neighborhood
    
    
    28.5
    
    
    
    7.1
    %
    
    
    26.6
    
    
    
    11.8
    %
 As of September 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeBacklog Units
    
    
    21,171
    
    
    
    19.4
    %
    
    
    17,727
    
    
    
    16.3
    %Lots Owned
    
    
    106,041
    
    
    
    24.3
    %
    
    
    85,335
    
    
    
    26.1
    %Lots Controlled
    
    
    179,590
    
    
    
    31.1
    %
    
    
    136,979
    
    
    
    45.3
    %Total Lots Owned and Controlled
    
    
    285,631
    
    
    
    28.5
    %
    
    
    222,314
    
    
    
    37.3
    %
    28




---



##### Table of Contents



International
  FINANCIAL SERVICES
  29




---



##### Table of Contents



For the Three Months Ended September 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeRevenues
    
    $
    326.2
    
    
    
    17.8
    %
    
    $
    276.9
    
    
    
    (4.7
    %)Cost of Sales  Interest Expense
    
    
    (107.7
    )
    
    
    57.2
    %
    
    
    (68.5
    )
    
    
    18.3
    %Selling, General and
Administrative Expenses
    
    
    (164.8
    )
    
    
    6.2
    %
    
    
    (155.2
    )
    
    
    (0.6
    %)Operating Earnings
    
    $
    53.7
    
    
    
    0.9
    %
    
    $
    53.2
    
    
    
    (30.5
    %)Interest Margin
    
    $
    84.7
    
    
    
    (7.7
    %)
    
    $
    91.8
    
    
    
    12.2
    %Origination Volume
    
    $
    5,913.1
    
    
    
    36.0
    %
    
    $
    4,348.5
    
    
    
    (20.4
    %)Number of Loans Originated
    
    
    31,513
    
    
    
    15.1
    %
    
    
    27,374
    
    
    
    (23.7
    %)
 For the Six Months Ended September 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeRevenues
    
    $
    630.1
    
    
    
    14.3
    %
    
    $
    551.2
    
    
    
    (1.1
    %)Cost of Sales  Interest Expense
    
    
    (202.1
    )
    
    
    55.3
    %
    
    
    (130.1
    )
    
    
    19.4
    %Selling, General and
Administrative Expenses
    
    
    (326.5
    )
    
    
    5.2
    %
    
    
    (310.3
    )
    
    
    1.3
    %Operating Earnings
    
    $
    101.5
    
    
    
    (8.4
    %)
    
    $
    110.8
    
    
    
    (22.0
    %)Interest Margin
    
    $
    172.1
    
    
    
    (9.1
    %)
    
    $
    189.4
    
    
    
    37.7
    %Origination Volume
    
    $
    11,135.4
    
    
    
    19.8
    %
    
    $
    9,291.2
    
    
    
    (14.7
    %)Number of Loans Originated
    
    
    60,719
    
    
    
    4.6
    %
    
    
    58,067
    
    
    
    (19.5
    %)
  30




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##### Table of Contents



Prime Mortgage Lending
  For the Three Months Ended September 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeRevenues
    
    $
    120.9
    
    
    
    15.0
    %
    
    $
    105.1
    
    
    
    (35.0
    %)Cost of Sales  Interest Expense
    
    
    (17.8
    )
    
    
    125.3
    %
    
    
    (7.9
    )
    
    
    (13.2
    %)Selling, General and
Administrative
Expenses
    
    
    (82.4
    )
    
    
    9.1
    %
    
    
    (75.5
    )
    
    
    (17.8
    %)Operating Earnings
    
    $
    20.7
    
    
    
    (4.6
    %)
    
    $
    21.7
    
    
    
    (64.2
    %)Operating Margin
    
    
    17.1
    %
    
    NM
    
    
    
    20.6
    %
    
    NMInterest Margin
    
    $
    9.7
    
    
    
    (28.7
    %)
    
    $
    13.6
    
    
    
    (35.2
    %)Average Interest Earning Assets
    
    $
    1,775.6
    
    
    
    30.6
    %
    
    $
    1,359.9
    
    
    
    (39.4
    %)Average Yield
    
    
    6.20
    %
    
    NM
    
    
    
    6.31
    %
    
    NMAverage Interest Bearing
Liabilities
    
    $
    1,819.7
    
    
    
    37.0
    %
    
    $
    1,328.5
    
    
    
    (38.3
    %)Average Rate Paid
    
    
    3.93
    %
    
    NM
    
    
    
    2.35
    %
    
    NM
 For the Six Months Ended September 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeRevenues
    
    $
    230.9
    
    
    
    7.8
    %
    
    $
    214.2
    
    
    
    (30.6
    %)Cost of Sales  Interest Expense
    
    
    (30.6
    )
    
    
    105.4
    %
    
    
    (14.9
    )
    
    
    34.2
    %Selling, General and
Administrative
Expenses
    
    
    (158.3
    )
    
    
    8.8
    %
    
    
    (145.5
    )
    
    
    (21.6
    %)Operating Earnings
    
    $
    42.0
    
    
    
    (21.9
    %)
    
    $
    53.8
    
    
    
    (52.0
    %)Operating Margin
    
    
    18.2
    %
    
    NM
    
    
    
    25.1
    %
    
    NMInterest Margin
    
    $
    20.3
    
    
    
    (30.5
    %)
    
    $
    29.2
    
    
    
    24.3
    %Average Interest Earning Assets
    
    $
    1,632.5
    
    
    
    5.9
    %
    
    $
    1,542.1
    
    
    
    17.8
    %Average Yield
    
    
    6.24
    %
    
    NM
    
    
    
    5.73
    %
    
    NMAverage Interest Bearing
Liabilities
    
    $
    1,653.9
    
    
    
    11.2
    %
    
    $
    1,487.8
    
    
    
    22.3
    %Average Rate Paid
    
    
    3.72
    %
    
    NM
    
    
    
    1.97
    %
    
    NM
   31




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##### Table of Contents



For the Three Months Ended September 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeLoan Sales to Investors
    
    $
    3,551.2
    
    
    
    42.5
    %
    
    $
    2,492.9
    
    
    
    (51.7
    %)Gain on Sale of Mortgage Loans
    
    $
    45.9
    
    
    
    22.4
    %
    
    $
    37.5
    
    
    
    (52.9
    %)
 For the Six Months Ended September 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeLoan Sales to Investors
    
    $
    6,104.4
    
    
    
    20.6
    %
    
    $
    5,060.9
    
    
    
    (47.2
    %)Gain on Sale of Mortgage Loans
    
    $
    85.3
    
    
    
    19.6
    %
    
    $
    71.3
    
    
    
    (54.4
    %)
  32




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##### Table of Contents



For the Three Months Ended September 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeOrigination Volume (in millions)
    
    $
    4,278.7
    
    
    
    38.4
    %
    
    $
    3,090.5
    
    
    
    (30.4
    %)Number of Loans OriginatedBuilder
    
    
    6,245
    
    
    
    20.0
    %
    
    
    5,206
    
    
    
    10.0
    %Retail
    
    
    12,904
    
    
    
    13.7
    %
    
    
    11,349
    
    
    
    (47.4
    %)19,149
    
    
    
    15.7
    %
    
    
    16,555
    
    
    
    (37.1
    %)Number of Loan ApplicationsBuilder
    
    
    7,148
    
    
    
    24.9
    %
    
    
    5,721
    
    
    
    (6.9
    %)Retail
    
    
    11,658
    
    
    
    17.1
    %
    
    
    9,957
    
    
    
    (38.7
    %)18,806
    
    
    
    20.0
    %
    
    
    15,678
    
    
    
    (30.0
    %)Average Loan Size
    
    $
    223,400
    
    
    
    19.7
    %
    
    $
    186,700
    
    
    
    10.6
    %
 For the Six Months Ended September 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeOrigination Volume (in millions)
    
    $
    8,099.5
    
    
    
    22.9
    %
    
    $
    6,592.0
    
    
    
    (26.7
    %)Number of Loans OriginatedBuilder
    
    
    11,864
    
    
    
    16.0
    %
    
    
    10,225
    
    
    
    11.5
    %Retail
    
    
    25,215
    
    
    
    (1.1
    %)
    
    
    25,503
    
    
    
    (42.5
    %)37,079
    
    
    
    3.8
    %
    
    
    35,728
    
    
    
    (33.3
    %)Number of Loan ApplicationsBuilder
    
    
    14,464
    
    
    
    21.9
    %
    
    
    11,867
    
    
    
    (2.8
    %)Retail
    
    
    22,247
    
    
    
    6.8
    %
    
    
    20,824
    
    
    
    (49.8
    %)36,711
    
    
    
    12.3
    %
    
    
    32,691
    
    
    
    (39.1
    %)Average Loan Size
    
    $
    218,400
    
    
    
    18.4
    %
    
    $
    184,500
    
    
    
    9.8
    %
   33




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##### Table of Contents



Sub-Prime Home Equity Lending
  For the Three Months Ended September 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeRevenues
    
    $
    207.0
    
    
    
    20.5
    %
    
    $
    171.8
    
    
    
    33.2
    %Cost of Sales  Interest Expense
    
    
    (89.9
    )
    
    
    48.3
    %
    
    
    (60.6
    )
    
    
    24.2
    %Selling, General and Administrative
Expenses:Operating Expenses
    
    
    (59.2
    )
    
    
    6.9
    %
    
    
    (55.4
    )
    
    
    22.6
    %Loan Loss Provision
    
    
    (23.7
    )
    
    
    (2.5
    %)
    
    
    (24.3
    )
    
    
    27.2
    %Operating Earnings
    
    $
    34.2
    
    
    
    8.6
    %
    
    $
    31.5
    
    
    
    98.1
    %Interest Margin
    
    $
    75.0
    
    
    
    (4.1
    %)
    
    $
    78.2
    
    
    
    28.6
    %Average Interest Earning Assets
    
    $
    8,441.6
    
    
    
    18.6
    %
    
    $
    7,120.6
    
    
    
    32.6
    %Average Yield
    
    
    7.81
    %
    
    NM
    
    
    
    7.80
    %
    
    NMAverage Interest Bearing Liabilities
    
    $
    8,680.8
    
    
    
    18.0
    %
    
    $
    7,357.9
    
    
    
    31.0
    %Average Rate Paid
    
    
    4.14
    %
    
    NM
    
    
    
    3.30
    %
    
    NM
 For the Six Months Ended September 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeRevenues
    
    $
    402.5
    
    
    
    19.4
    %
    
    $
    337.0
    
    
    
    35.5
    %Cost of Sales  Interest Expense
    
    
    (171.5
    )
    
    
    48.9
    %
    
    
    (115.2
    )
    
    
    17.7
    %Selling, General and Administrative
Expenses:Operating Expenses
    
    
    (120.3
    )
    
    
    5.8
    %
    
    
    (113.7
    )
    
    
    32.4
    %Loan Loss Provision
    
    
    (49.0
    )
    
    
    (4.1
    %)
    
    
    (51.1
    )
    
    
    46.4
    %Operating Earnings
    
    $
    61.7
    
    
    
    8.2
    %
    
    $
    57.0
    
    
    
    89.4
    %Interest Margin
    
    $
    151.8
    
    
    
    (5.2
    %)
    
    $
    160.2
    
    
    
    40.5
    %Average Interest Earning Assets
    
    $
    8,303.6
    
    
    
    19.8
    %
    
    $
    6,933.6
    
    
    
    35.3
    %Average Yield
    
    
    7.79
    %
    
    NM
    
    
    
    7.94
    %
    
    NMAverage Interest Bearing Liabilities
    
    $
    8,518.3
    
    
    
    18.8
    %
    
    $
    7,168.6
    
    
    
    34.2
    %Average Rate Paid
    
    
    4.03
    %
    
    NM
    
    
    
    3.22
    %
    
    NM
  34




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##### Table of Contents



For the Three Months Ended September 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeOrigination Volume (in millions)
    
    $
    1,634.4
    
    
    
    29.9
    %
    
    $
    1,258.0
    
    
    
    22.8
    %Number of Loans Originated
    
    
    12,364
    
    
    
    14.3
    %
    
    
    10,819
    
    
    
    12.8
    %Number of Loan Applications
    
    
    111,290
    
    
    
    12.0
    %
    
    
    99,333
    
    
    
    16.0
    %Average Loan Size
    
    $
    132,200
    
    
    
    13.7
    %
    
    $
    116,300
    
    
    
    8.9
    %
 For the Six Months Ended September 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeOrigination Volume (in millions)
    
    $
    3,035.9
    
    
    
    12.5
    %
    
    $
    2,699.2
    
    
    
    41.9
    %Number of Loans Originated
    
    
    23,640
    
    
    
    5.8
    %
    
    
    22,339
    
    
    
    20.2
    %Number of Loan Applications
    
    
    216,197
    
    
    
    9.6
    %
    
    
    197,298
    
    
    
    18.6
    %Average Loan Size
    
    $
    128,400
    
    
    
    6.3
    %
    
    $
    120,800
    
    
    
    18.1
    %
 35




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##### Table of Contents



For the Six Months Ended September 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeServicing Portfolio:Number of LoansPortfolio Accounting Method
    
    
    86,550
    
    
    
    8.7
    %
    
    
    79,607
    
    
    
    14.1
    %Serviced for Others
    
    
    18,815
    
    
    
    21.3
    %
    
    
    15,508
    
    
    
    30.4
    %Total
    
    
    105,365
    
    
    
    10.8
    %
    
    
    95,115
    
    
    
    16.5
    %Dollars in billionsPortfolio Accounting Method
    
    $
    8.54
    
    
    
    18.9
    %
    
    $
    7.18
    
    
    
    27.8
    %Serviced for Others
    
    
    1.79
    
    
    
    47.9
    %
    
    
    1.21
    
    
    
    70.4
    %Total
    
    $
    10.33
    
    
    
    23.1
    %
    
    $
    8.39
    
    
    
    32.5
    %
      36




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##### Table of Contents



CONSTRUCTION SERVICES
  For the Three Months Ended September 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeRevenues
    
    $
    391.9
    
    
    
    (13.3
    %)
    
    $
    452.2
    
    
    
    17.0
    %Operating Earnings
    
    $
    4.0
    
    
    
    (27.3
    %)
    
    $
    5.5
    
    
    
    19.6
    %New Contracts Executed
    
    $
    837.0
    
    
    
    129.5
    %
    
    $
    364.7
    
    
    
    (38.1
    %)
 For the Six Months Ended September 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeRevenues
    
    $
    758.0
    
    
    
    (14.5
    %)
    
    $
    886.4
    
    
    
    16.3
    %Operating Earnings
    
    $
    6.7
    
    
    
    (33.0
    %)
    
    $
    10.0
    
    
    
    9.9
    %New Contracts Executed
    
    $
    1,555.2
    
    
    
    121.3
    %
    
    $
    702.7
    
    
    
    (17.4
    %)
 As of September 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeBacklog of Uncompleted Contracts
    
    $
    2,798.4
    
    
    
    79.1
    %
    
    $
    1,562.7
    
    
    
    (2.8
    %)
   37




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##### Table of Contents



OTHER
  For the Three Months Ended September 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeOperating Loss from Home Services Operations
    
    $
    (2.2
    )
    
    
    4.8
    %
    
    $
    (2.1
    )
    
    
    90.9
    %Operating Loss from Investment
Real Estate Operations
    
    
    (0.3
    )
    
    
    50.0
    %
    
    
    (0.2
    )
    
    
    (100.8
    %)Corporate General and Administrative Expense
    
    
    (23.5
    )
    
    
    23.7
    %
    
    
    (19.0
    )
    
    
    (13.6
    %)Interest Expense
    
    
    (3.1
    )
    
    
    (34.0
    %)
    
    
    (4.7
    )
    
    
    (71.3
    %)Operating Loss
    
    $
    (29.1
    )
    
    
    11.9
    %
    
    $
    (26.0
    )
    
    
    95.5
    %
 For the Six Months Ended September 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeOperating Loss from Home Services Operations
    
    $
    (4.8
    )
    
    
    2.1
    %
    
    $
    (4.7
    )
    
    
    95.8
    %Operating Earnings (Loss) from Investment
Real Estate Operations
    
    
    (0.4
    )
    
    
    (104.1
    %)
    
    
    9.7
    
    
    
    (62.5
    %)Corporate General and Administrative Expense
    
    
    (44.2
    )
    
    
    14.5
    %
    
    
    (38.6
    )
    
    
    (6.1
    %)Interest Expense
    
    
    (5.7
    )
    
    
    (37.4
    %)
    
    
    (9.1
    )
    
    
    (71.5
    %)Operating Loss
    
    $
    (55.1
    )
    
    
    29.0
    %
    
    $
    (42.7
    )
    
    
    (13.7
    %)
     38




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##### Table of Contents



FINANCIAL CONDITION AND LIQUIDITY
  For the Six Months Ended September 30,2005
    
    
    2004Net Cash (Used in) Provided by
Centex*Operating Activities
    
    $
    (877,283
    )
    
    $
    (533,040
    )Investing Activities
    
    
    75,867
    
    
    
    (28,492
    )Financing Activities
    
    
    554,032
    
    
    
    463,828Effect of Exchange Rate on Cash
    
    
    (1,479
    )
    
    
    45(248,863
    )
    
    
    (97,659
    )Financial ServicesOperating Activities
    
    
    (218,496
    )
    
    
    291,827Investing Activities
    
    
    (679,909
    )
    
    
    (739,059
    )Financing Activities
    
    
    898,682
    
    
    
    442,078277
    
    
    
    (5,154
    )Centex Corporation and SubsidiariesOperating Activities
    
    
    (1,262,173
    )
    
    
    (241,664
    )Investing Activities
    
    
    (462,648
    )
    
    
    (789,100
    )Financing Activities
    
    
    1,477,714
    
    
    
    927,906Effect of Exchange Rate on Cash
    
    
    (1,479
    )
    
    
    45Net Decrease in Cash
    
    $
    (248,586
    )
    
    $
    (102,813
    )
 *
    
    Centex represents a supplemental presentation that reflects the Financial Services segment
as if accounted for under the equity method. We believe that separate disclosure of the
consolidating information is useful 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 has limited obligations with respect to the indebtedness of our
Financial Services subsidiaries. Management uses this information in its financial and
strategic planning. We also use this presentation to allow investors to compare us to
homebuilders that do not have financial services operations.
   39




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##### Table of Contents



Existing Credit
    
    
    AvailableFacilities
    
    
    CapacityCentexMulti-Bank Revolving Credit FacilityRevolving Credit
    
    $
    1,000,000
    
    
    $
    1,000,000Letters of Credit
    
    
    500,000
    
    
    
    157,6451,500,000
    
    
    
    1,157,645
    (1) (2)Financial ServicesMortgage Servicer Advance Facility
    
    
    100,000
    
    
    
    81,871
    (3)Secured Credit Facilities
    
    
    614,000
    
    
    
    279,585
    (4)Harwood Street Funding I, LLC Facility
    
    
    3,000,000
    
    
    
    1,348,070Harwood Street Funding II, LLC Facility
    
    
    4,000,000
    
    
    
    1,734,4637,714,000
    
    
    
    3,443,989$
    9,214,000
    
    
    $
    4,601,634
 (1)
    
    This is an unsecured, committed, multi-bank revolving credit facility, maturing in July
2010, which serves as backup for our $900 million commercial paper program and provides $500
million of letter of credit capacity. There have been no direct borrowings under this
revolving credit facility since its inception.(2)
    
    In conjunction with the issuance of surety bonds in support of our Construction Services
activity, Centex Corporation has agreed to provide letters of credit of up to $100 million if
Centex Corporations public debt ratings fall below investment grade. In support of this
ratings trigger, we maintain a minimum of $100 million in unused committed credit at all
times.(3)
    
    Under this facility, Home Equity is permitted to securitize its mortgage servicer advances in
an amount to $100 million with a final maturity of May 2011. This facility has no recourse to
Centex Corporation.(4)
    
    CTX Mortgage Company, LLC and its related companies and Home Equity share in a $300 million
secured, committed credit facility to finance mortgage inventory. CTX Mortgage Company, LLC
and its related companies also maintain $314 million of secured, committed mortgage warehouse
facilities to finance mortgages. These facilities were increased to $390 million in October
2005.
     40




---



##### Table of Contents



CentexShort-term Debt:Short-term Notes Payable
    
    $
    3,684Senior Debt:Medium-term Note Programs, weighted-average 5.30%, due through 2008
    
    
    398,000Senior Notes, weighted-average 5.79%, due through 2016
    
    
    3,208,654Other Indebtedness, weighted-average 5.11%, due through 2015
    
    
    28,766Subordinated Debt:Subordinated Debentures, 8.75%, due in 2007
    
    
    99,8773,738,981Financial ServicesShort-term Debt:Short-term Notes Payable
    
    
    352,543Harwood Street Funding II, LLC Medium-term Notes
    
    
    200,000Harwood Street Funding I and II, LLC Secured Liquidity Notes
    
    
    3,505,959Home Equity Asset-Backed Certificates, weighted-average 4.33%, due
through 2036
    
    
    6,376,326Harwood Street Funding I, LLC Variable Rate Subordinated Extendable
Certificates, weighted-average 5.86%, due through 2010
    
    
    60,000Harwood Street Funding II, LLC Variable Rate Subordinated Notes,
weighted-average 5.72%, due through 2011
    
    
    150,00010,644,828Total
    
    $
    14,383,809
  CERTAIN OFF-BALANCE SHEET OBLIGATIONS
  Joint Ventures
  41




---



##### Table of Contents



CRITICAL ACCOUNTING ESTIMATES
  Impairment of Long-Lived Assets
  Goodwill
  Inventory Valuation
    42




---



##### Table of Contents



Land Held Under Option Agreements Not Owned
     Valuation of Residential Mortgage Loans Held for Investment
     Mortgage Securitization Residual Interest
  43




---



##### Table of Contents



Loan Origination Reserve
   Warranty Accruals
  Insurance Accruals
  RECENT ACCOUNTING PRONOUNCEMENTS
   44




---



##### Table of Contents



SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
   
    
    Changes in regional and national economic conditions, such as job growth, interest
rates and consumer confidence, could decrease demand and pricing for new homes and
adversely affect our profitability;
    
    Increased competitive conditions in the residential markets in which we operate or
related markets could reduce our home deliveries or decrease our profitability;
    
    Slow growth or no growth homebuilding initiatives approved by municipalities could
negatively impact our ability to build or timely build in these areas; and
    
    Compliance with the extensive and complex laws and regulations that affect the land
development and homebuilding process, and other aspects of our business, could have
substantial costs both in terms of time and money.
 45




---



##### Table of Contents




    
    Increases in interest rates are likely to result in a decrease in the volume of
mortgage loan refinancing transactions and can result in decreased interest margins,
which could adversely affect the volume of loan originations and reduce our revenues,
operating margins and earnings;
    
    Although we establish an allowance for credit losses on residential mortgage loans
held for investment, there can be no assurance that such allowance will be sufficient
to cover any losses or judgments;
    
    A significant decline in the ratings of our servicing of residential home mortgages
could adversely affect the profitability of our Home Equity operations; and
    
    Changes in the laws and regulations that affect loan origination or changes in the
way that such laws and regulations are enforced may adversely affect the way that we
operate or our ability to profitably originate loans.
  
    
    Reductions in capital spending trends, changes in federal and state appropriations
for construction projects, decreases in financing and capital availability or increased
competitive pressures on the availability and pricing of construction projects could
result in a reduction in the supply of suitable projects and reduce margins on
construction contracts; and
    
    Changes in the timing and funding of new awards, cancellations or changes in the
scope of existing contracts, the ability to meet performance or schedule guarantees and
cost overruns may adversely affect our operations.
  
    
    Any legislation that restricts the ability of
government-sponsored enterprises, principally FNMA and FHLMC, to
package mortgages into investment
securities or that reduces the liquidity of secondary markets could reduce demand for our
homes and/or the loans that we originate;
    
    A significant decline in the credit rating of our senior debt securities, which is
currently investment grade, could adversely affect our ability to generate or obtain
the capital to achieve our growth objectives;
    
    Increases in interest rates may reduce home sales and loan originations;
    
    Natural disasters or adverse weather conditions could delay new home deliveries,
increase costs, reduce the availability of raw materials and skilled labor, cause
delays in construction, negatively impact the demand for new homes in affected
areas and damage homes in affected areas that serve as collateral for
mortgage loans that Home Equity services;
    
    Increased costs or shortages of building materials, labor disputes and shortages of
skilled labor could cause increases in construction costs and construction delays;
    
    Changes in federal or state income tax laws that eliminate or substantially modify
certain real estate related income tax deductions, such as for
mortgage interest or property taxes could adversely impact the demand
for, and/or sales prices of, new homes, mortgage loans and home equity loans; and
    
    Unusually high levels of warranty and other claims related to construction defects
and other construction-related issues could adversely affect our profitability.
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  46




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##### Table of Contents



Item 4. Controls and Procedures
  
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
   
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  Issuer Purchases of Equity SecuritiesTotal Number of
    
    
    Maximum Number ofShares Purchased as
    
    
    Shares that May YetTotal Number
    
    
    Average Price Paid
    
    
    Part of Publicly
    
    
    Be Purchased Underof Shares Purchased
    
    
    Per Share
    
    
    Announced Plan
    
    
    the PlanPeriod
    
    
    
    
    
    
    
    
    
    
    6,375,600
    
    
    
    1,974,000July 1-31
    
    
    50,000
    
    
    $
    74.28
    
    
    
    50,000
    
    
    
    1,924,000August 1-31
    
    
    950,000
    
    
    $
    69.80
    
    
    
    950,000
    
    
    
    974,000September 1-30 (1)
    
    
    6,640
    
    
    $
    64.58
    
    
    
    
    
    
    
    5,000,000Total (2)
    
    
    1,006,640
    
    
    $
    69.99
    
    
    
    7,375,600
    
    
    
    5,000,000
 (1)
    
    Of the 1,006,640 shares repurchased for the quarter ended September 30, 2005, 6,640 shares
represent the delivery to the Company by employees or directors of previously issued shares to
satisfy the exercise price of options and/or withholding taxes that arise on the exercise of
options or the vesting of restricted stock. These transactions are authorized under the terms
of the equity plans under which the options or other equity were awarded; however, these
transactions are not considered repurchases pursuant to the Companys share repurchase
program.(2)
    
    Except as provided in Note (1), all share repurchases were effected in accordance with the
safe harbor provisions of Rule 10b-18 of the Securities Exchange Act of 1934.
  47




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##### Table of Contents



Item 4. Submission of Matters to a Vote of Security Holders
   Number of SharesFor
    
    
    Withheld
    
    
    Broker Non-VotesBarbara T. Alexander
    
    
    114,677,885
    
    
    
    1,114,701
    
    
    
    Juan L. Elek
    
    
    114,944,096
    
    
    
    848,490
    
    
    
    Timothy R. Eller
    
    
    114,392,046
    
    
    
    1,400,540
    
    
    
    James J. Postl
    
    
    114,951,326
    
    
    
    841,260
    
    
    
    Ursula O. Fairbairn
    
    
    114,945,929
    
    
    
    846,657
    
    
    
    
  Number of SharesFor
    
    Against
    
    
    Abstained
    
    
    Broker Non-Votes115,027,123
    
    
    62,956
    
    
    
    702,506
    
    
    
    
 
 Item 5. Other Information
 Nomination of Directors
    48




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##### Table of Contents



Deadlines for Stockholder Proposals
  
 Item 6. Exhibits
  3.1
    
    Restated Articles of Incorporation of Centex Corporation
(Centex), as amended (incorporated by reference from Exhibit 3.1 to Centexs
Annual Report on Form 10-K for the fiscal year ended March 31, 2004).3.2
    
    Amended and Restated By-Laws of Centex dated October 11, 2005
(incorporated by reference from Exhibit 3.1 to Centexs Current Report on Form
8-K filed on October 12, 2005).4.1
    
    Any instrument with respect to long-term debt, where the
securities authorized thereunder do not exceed 10% of the total assets of Centex
and its subsidiaries, has not been filed; these instruments relate to (a)
long-term senior and subordinated debt of Centex issued pursuant to supplements
to the indentures filed as exhibits 4.5 and 4.6 to Centexs Annual Report on
Form 10-K for the fiscal year ended March 31, 2005, which supplements have also
been filed with the SEC as exhibits to various Centex registration statements or
to reports incorporated by reference in such registration statements, (b)
long-term debt issued pursuant to pooling and servicing agreements or similar
agreements in connection with certain asset securitizations involving certain
subsidiaries of Centex, which agreements have been filed with the SEC as
exhibits to various registration statements of CHEC Funding, LLC or to reports
incorporated by reference in such registration statements, (c) long-term debt
issued pursuant to indentures or other agreements in connection with certain
asset securitizations involving certain subsidiaries of Centex in private
transactions and (d) other long-term debt of Centex; Centex agrees to furnish a
copy of such instruments to the SEC upon request.10.1
    
    Credit Agreement, dated July 1, 2005, among Centex Corporation,
Bank of America, N.A., as administrative agent, and the lenders named therein
(incorporated by reference from Exhibit 10.1 to Centexs Current Report on Form
8-K filed on July 8, 2005).10.2
    
    Form of Director Indemnification Agreement* (incorporated by
reference from Exhibit 10.1 to Centexs Current Report on Form 8-K filed on July
15, 2005).10.3
    
    Form of deferred compensation agreement for Executive Deferred
Compensation Plan (as amended).*12.1
    
    Computation of Ratio of Earnings to Fixed Charges.
 49




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##### Table of Contents



31.1
    
    Certification of the Chief Executive Officer of Centex
Corporation pursuant to Rules 13a-14 and 15d-14 promulgated under the
Securities Exchange Act of 1934, as amended.31.2
    
    Certification of the Chief Financial Officer of Centex
Corporation pursuant to Rules 13a-14 and 15d-14 promulgated under the
Securities Exchange Act of 1934, as amended.32.1
    
    Certification of the Chief Executive Officer of Centex
Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of the Chief Financial Officer of Centex
Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
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##### Table of Contents



Signatures
  CENTEX CORPORATIONRegistrantNovember 1, 2005
    
    /s/ Leldon E. EcholsLeldon E. EcholsExecutive Vice President andChief Financial Officer(principal financial officer)November 1, 2005
    
    /s/ Mark D. KempMark D. KempSenior Vice President-Controller(principal accounting officer)
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