##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    

    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
SEPTEMBER 30, 2008
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR 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
  þ
    
    Large accelerated filer
    
    o
    
    Accelerated filer
    
    o
    
    Non-accelerated filer
    
    o
    
    Smaller reporting company(Do not check if a smaller reporting company)
 ü




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##### 



Centex Corporation and Subsidiaries
  
 Form 10-Q Table of Contents
 September 30, 2008
 Item 1.
    
    Financial Statements
    
    
    2Statements of Consolidated Operations
    
    
    2Consolidated Balance Sheets with Consolidating Details
    
    
    4Statements of Consolidated Cash Flows with Consolidating Details
    
    
    6Notes to Consolidated Financial Statements
    
    
    8Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    28Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    58Item 4.
    
    Controls and Procedures
    
    
    59PART II  OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    60Item 1A.
    
    Risk Factors
    
    
    60Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    64Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    64Item 6.
    
    Exhibits
    
    
    66Signatures
    
    
    68EX-10.2AEX-10.2CEX-10.2DEX-12.1EX-31.1EX-31.2EX-32.1EX-32.2
  1




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 Centex Corporation and Subsidiaries
 
 Statements of Consolidated Operations
   For the Three Months Ended September 30,2008
    
    
    2007RevenuesHome Building
    
    $
    952,596
    
    
    $
    2,105,484Financial Services
    
    
    52,409
    
    
    
    80,7001,005,005
    
    
    
    2,186,184Costs and ExpensesHome Building
    
    
    1,057,333
    
    
    
    3,026,395Financial Services
    
    
    96,567
    
    
    
    134,782Other
    
    
    (304
    )
    
    
    (223
    )Corporate General and Administrative
    
    
    53,435
    
    
    
    34,540Interest Expense
    
    
    4,973
    
    
    
    1,212,004
    
    
    
    3,195,494Loss from Unconsolidated Entities
    
    
    (12,902
    )
    
    
    (36,840
    )Interest and Other Income
    
    
    7,856
    
    
    
    22,957Loss from Continuing Operations
Before Income Taxes
    
    
    (212,045
    )
    
    
    (1,023,193
    )Income Tax Benefit
    
    
    (10,425
    )
    
    
    (378,432
    )Loss from Continuing Operations
    
    
    (201,620
    )
    
    
    (644,761
    )Earnings from Discontinued Operations, net of Tax
Provision of $18,313 and $572
    
    
    29,630
    
    
    
    928Net Loss
    
    $
    (171,990
    )
    
    $
    (643,833
    )Basic and Diluted Earnings (Loss) Per ShareContinuing Operations
    
    $
    (1.62
    )
    
    $
    (5.27
    )Discontinued Operations
    
    
    0.24
    
    
    
    0.01$
    (1.38
    )
    
    $
    (5.26
    )Average Shares OutstandingBasic and Diluted
    
    
    124,278,555
    
    
    
    122,301,587Cash Dividends Per Share
    
    $
    0.04
    
    
    $
    0.04
 See Notes to Consolidated Financial Statements.
 2




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##### Table of Contents



Centex Corporation and Subsidiaries
 Statements of Consolidated Operations
   For the Six Months Ended September 30,2008
    
    
    2007RevenuesHome Building
    
    $
    2,002,295
    
    
    $
    3,909,304Financial Services
    
    
    128,832
    
    
    
    178,6662,131,127
    
    
    
    4,087,970Costs and ExpensesHome Building
    
    
    2,221,936
    
    
    
    4,981,941Financial Services
    
    
    166,923
    
    
    
    217,779Other
    
    
    (1,110
    )
    
    
    (223
    )Corporate General and Administrative
    
    
    112,074
    
    
    
    79,521Interest Expense
    
    
    11,153
    
    
    
    2,510,976
    
    
    
    5,279,018Loss from Unconsolidated Entities
    
    
    (33,199
    )
    
    
    (62,193
    )Interest and Other Income
    
    
    18,256
    
    
    
    33,183Loss from Continuing Operations
Before Income Taxes
    
    
    (394,792
    )
    
    
    (1,220,058
    )Income Tax Benefit
    
    
    (24,060
    )
    
    
    (443,216
    )Loss from Continuing Operations
    
    
    (370,732
    )
    
    
    (776,842
    )Earnings from Discontinued Operations, net of Tax
Provision of $38,544 and $3,121
    
    
    48,643
    
    
    
    5,050Net Loss
    
    $
    (322,089
    )
    
    $
    (771,792
    )Basic and Diluted Earnings (Loss) Per ShareContinuing Operations
    
    $
    (2.98
    )
    
    $
    (6.37
    )Discontinued Operations
    
    
    0.39
    
    
    
    0.04$
    (2.59
    )
    
    $
    (6.33
    )Average Shares OutstandingBasic and Diluted
    
    
    124,255,085
    
    
    
    121,888,041Cash Dividends Per Share
    
    $
    0.08
    
    
    $
    0.08
 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 Corporation and SubsidiariesSeptember 30, 2008
    
    
    March 31, 2008AssetsCash and Cash Equivalents
    
    $
    1,298,932
    
    
    $
    586,810Restricted Cash
    
    
    49,557
    
    
    
    51,440Receivables -Mortgage Loans, net
    
    
    419,332
    
    
    
    515,880Trade and Other, including Notes of $21,701 and $17,388
    
    
    303,080
    
    
    
    823,861From Affiliates
    
    
    
    
    
    
    Inventories -Housing Projects
    
    
    3,887,442
    
    
    
    4,628,860Land Held for Development and Sale
    
    
    624,118
    
    
    
    558,756Land Held Under Option Agreements Not Owned
    
    
    148,395
    
    
    
    147,792Other
    
    
    17,135
    
    
    
    27,023Investments -Joint Ventures
    
    
    209,888
    
    
    
    206,822Unconsolidated Subsidiaries
    
    
    
    
    
    
    Property and Equipment, net
    
    
    59,701
    
    
    
    77,931Other Assets -Deferred Income Taxes, net
    
    
    64,662
    
    
    
    191,246Goodwill
    
    
    48,034
    
    
    
    51,622Deferred Charges and Other, net
    
    
    154,315
    
    
    
    172,300Assets of Discontinued Operations
    
    
    
    
    
    
    96,989$
    7,284,591
    
    
    $
    8,137,332Liabilities and Stockholders EquityAccounts Payable
    
    $
    133,177
    
    
    $
    259,170Accrued Liabilities
    
    
    1,709,838
    
    
    
    1,805,519Senior Notes and Other Debt
    
    
    3,103,567
    
    
    
    3,325,167Financial Services Mortgage Warehouse Facilities
    
    
    300,326
    
    
    
    337,053Liabilities of Discontinued Operations
    
    
    
    
    
    
    34,001Commitments and ContingenciesMinority Interests
    
    
    64,292
    
    
    
    77,761Stockholders Equity -Preferred Stock, Authorized 5,000,000 Shares, None Issued
    
    
    
    
    
    
    Common Stock, $.25 Par Value; Authorized 300,000,000Shares; Outstanding 124,286,179 and 123,278,881 Shares
    
    
    31,940
    
    
    
    31,763Capital in Excess of Par Value
    
    
    84,979
    
    
    
    95,088Retained Earnings
    
    
    2,033,658
    
    
    
    2,365,634Treasury Stock, at Cost; 3,473,756 and 3,774,643 Shares
    
    
    (177,186
    )
    
    
    (193,824
    )Total Stockholders Equity
    
    
    1,973,391
    
    
    
    2,298,661$
    7,284,591
    
    
    $
    8,137,332
 See Notes to Consolidated Financial Statements.
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##### Table of Contents



Centex Corporation and Subsidiaries
 Consolidated Balance Sheets with Consolidating Details
   Centex*
    
    
    Financial ServicesSeptember 30, 2008
    
    
    March 31, 2008
    
    
    September 30, 2008
    
    
    March 31, 2008$
    1,260,604
    
    
    $
    562,766
    
    
    $
    38,328
    
    
    $
    24,04427,410
    
    
    
    28,562
    
    
    
    22,147
    
    
    
    22,878
    
    
    
    
    
    
    
    419,332
    
    
    
    515,880294,655
    
    
    
    800,275
    
    
    
    8,425
    
    
    
    23,586
    
    
    
    
    
    
    
    40,856
    
    
    
    (43,463
    )3,887,442
    
    
    
    4,628,860
    
    
    
    
    
    
    
    624,118
    
    
    
    558,756
    
    
    
    
    
    
    
    148,395
    
    
    
    147,792
    
    
    
    
    
    
    
    8,279
    
    
    
    16,173
    
    
    
    8,856
    
    
    
    10,850209,888
    
    
    
    206,822
    
    
    
    
    
    
    
    187,708
    
    
    
    292,647
    
    
    
    
    
    
    
    52,132
    
    
    
    65,298
    
    
    
    7,569
    
    
    
    12,63314,154
    
    
    
    119,590
    
    
    
    50,508
    
    
    
    71,65642,670
    
    
    
    42,670
    
    
    
    5,364
    
    
    
    8,952139,798
    
    
    
    145,719
    
    
    
    14,517
    
    
    
    26,581
    
    
    
    96,989
    
    
    
    
    
    
    
    $
    6,897,253
    
    
    $
    7,712,919
    
    
    $
    615,902
    
    
    $
    673,597$
    129,003
    
    
    $
    250,096
    
    
    $
    4,174
    
    
    $
    9,0741,627,299
    
    
    
    1,727,684
    
    
    
    82,539
    
    
    
    77,8353,103,567
    
    
    
    3,325,167
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    300,326
    
    
    
    337,053
    
    
    
    34,001
    
    
    
    
    
    
    
    63,993
    
    
    
    77,310
    
    
    
    299
    
    
    
    451
    
    
    
    
    
    
    
    
    
    
    
    31,940
    
    
    
    31,763
    
    
    
    1
    
    
    
    184,979
    
    
    
    95,088
    
    
    
    527,467
    
    
    
    478,4672,033,658
    
    
    
    2,365,634
    
    
    
    (298,904
    )
    
    
    (229,284
    )(177,186
    )
    
    
    (193,824
    )
    
    
    
    
    
    
    1,973,391
    
    
    
    2,298,661
    
    
    
    228,564
    
    
    
    249,184$
    6,897,253
    
    
    $
    7,712,919
    
    
    $
    615,902
    
    
    $
    673,597
 *
    
    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.
 5




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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 30,2008
    
    
    2007Cash Flows  Operating ActivitiesNet Loss
    
    $
    (322,089
    )
    
    $
    (771,792
    )AdjustmentsDepreciation and Amortization
    
    
    20,359
    
    
    
    26,239Stock-based Compensation
    
    
    14,266
    
    
    
    21,939Provision for Losses on Mortgage Loans and Real Estate Owned
    
    
    5,599
    
    
    
    60,647Impairments and Write-off of Assets
    
    
    151,052
    
    
    
    1,111,989Deferred Income Tax Provision (Benefit)
    
    
    114,514
    
    
    
    (375,859
    )Loss of Joint Ventures and Unconsolidated Subsidiaries
    
    
    33,199
    
    
    
    62,193Distributions of Earnings of Joint Ventures and
Unconsolidated Subsidiaries
    
    
    8,401
    
    
    
    1,669Gain on Sale of Assets
    
    
    (84,745
    )
    
    
    (18,408
    )Changes in Assets and Liabilities, Excluding Effect of DispositionsDecrease (Increase) in Restricted Cash
    
    
    1,883
    
    
    
    26,006Decrease (Increase) in Trade Receivables, Notes and Other
    
    
    520,916
    
    
    
    (114,782
    )Decrease in Mortgage Loans Held for Sale
    
    
    54,725
    
    
    
    653,352Decrease in Receivables from Affiliates
    
    
    
    
    
    
    Decrease
(Increase) in Housing Projects and Land Held for Development and Sale
    
    
    498,177
    
    
    
    (52,739
    )Decrease in Other Inventories
    
    
    8,752
    
    
    
    8,975Decrease in Accounts Payable and Accrued Liabilities
    
    
    (231,560
    )
    
    
    (341,686
    )Decrease (Increase) in Other Assets, net
    
    
    18,221
    
    
    
    21,958Other
    
    
    (564
    )
    
    
    (282
    )811,106
    
    
    
    319,419Cash Flows  Investing Activities(Issuance of) Payments received on Notes Receivable
    
    
    (3,128
    )
    
    
    2,188Decrease in Construction Loans
    
    
    32,823
    
    
    
    34,591Investment in and Advances to Joint Ventures
    
    
    (50,667
    )
    
    
    (100,548
    )Distributions of Capital from Joint Ventures
    
    
    5,414
    
    
    
    48,417Distributions from (Investment in and Advances to) Unconsolidated Subsidiaries
    
    
    
    
    
    
    Purchases of Property and Equipment, net
    
    
    (1,951
    )
    
    
    (4,615
    )Proceeds from Dispositions
    
    
    188,782
    
    
    
    10,813Other
    
    
    
    
    
    
    (3,563
    )171,273
    
    
    
    (12,717
    )Cash Flows  Financing ActivitiesDecrease in Restricted Cash
    
    
    
    
    
    
    (577
    )Decrease in Short-term Debt, net
    
    
    (40,777
    )
    
    
    (862,201
    )CentexIssuance of Long-term Debt
    
    
    
    
    
    
    107Repayment of Long-term Debt
    
    
    (217,705
    )
    
    
    (245,776
    )Proceeds from Stock Option Exercises
    
    
    624
    
    
    
    26,346Excess Tax (Shortfall) Benefit from Stock-Based Awards
    
    
    (2,526
    )
    
    
    2,413Purchases of Common Stock, net
    
    
    (14
    )
    
    
    (411
    )(Dividends Paid) and Capital Contributions Received
    
    
    (9,887
    )
    
    
    (9,668
    )(270,285
    )
    
    
    (1,089,767
    )Net Increase (Decrease) in Cash and Cash Equivalents
    
    
    712,094
    
    
    
    (783,065
    )Cash and Cash Equivalents at Beginning of Period(1)
    
    
    586,838
    
    
    
    882,754Cash and Cash Equivalents at End of Period(2)
    
    $
    1,298,932
    
    
    $
    99,689
 See Notes to Consolidated Financial Statements.
 (1)
    
    Amount includes cash and cash equivalents of discontinued operations of $28 as of March 31,
2008 and $220 as of March 31, 2007.(2)
    
    Amount includes cash and cash equivalents of discontinued operations of $0 as of September
30, 2008 and $20 as of September 30, 2007.
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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 30,2008
    
    
    2007
    
    
    2008
    
    
    2007$
    (322,089
    )
    
    $
    (771,792
    )
    
    $
    (5,920
    )
    
    $
    (24,310
    )17,909
    
    
    
    23,101
    
    
    
    2,450
    
    
    
    3,13814,266
    
    
    
    21,939
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,599
    
    
    
    60,647151,052
    
    
    
    1,111,989
    
    
    
    
    
    
    
    93,366
    
    
    
    (357,289
    )
    
    
    21,148
    
    
    
    (18,570
    )39,119
    
    
    
    86,503
    
    
    
    
    
    
    
    72,101
    
    
    
    16,669
    
    
    
    
    
    
    
    (39,379
    )
    
    
    (18,408
    )
    
    
    (45,366
    )
    
    
    1,152
    
    
    
    28,121
    
    
    
    731
    
    
    
    (2,115
    )506,713
    
    
    
    (122,161
    )
    
    
    14,203
    
    
    
    7,379
    
    
    
    
    
    
    
    54,725
    
    
    
    653,352
    
    
    
    
    
    
    
    (65,319
    )
    
    
    (6,239
    )498,177
    
    
    
    (52,739
    )
    
    
    
    
    
    
    3,357
    
    
    
    4,874
    
    
    
    5,395
    
    
    
    4,101(228,998
    )
    
    
    (320,087
    )
    
    
    (2,562
    )
    
    
    (21,599
    )6,267
    
    
    
    30,294
    
    
    
    11,954
    
    
    
    (8,336
    )(412
    )
    
    
    (104
    )
    
    
    (152
    )
    
    
    (178
    )812,601
    
    
    
    (319,090
    )
    
    
    (3,114
    )
    
    
    647,270(3,128
    )
    
    
    2,188
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32,823
    
    
    
    34,591(50,667
    )
    
    
    (100,548
    )
    
    
    
    
    
    
    5,414
    
    
    
    48,417
    
    
    
    
    
    
    
    35,319
    
    
    
    (196,761
    )
    
    
    
    
    
    
    (1,613
    )
    
    
    (3,430
    )
    
    
    (338
    )
    
    
    (1,185
    )133,442
    
    
    
    10,813
    
    
    
    55,340
    
    
    
    
    
    
    
    (3,563
    )
    
    
    
    
    
    
    118,767
    
    
    
    (242,884
    )
    
    
    87,825
    
    
    
    33,406
    
    
    
    
    
    
    
    
    
    
    
    (577
    )(4,050
    )
    
    
    (249
    )
    
    
    (36,727
    )
    
    
    (861,952
    )
    
    
    
    107
    
    
    
    
    
    
    
    (217,705
    )
    
    
    (245,776
    )
    
    
    
    
    
    
    624
    
    
    
    26,346
    
    
    
    
    
    
    
    (2,526
    )
    
    
    2,413
    
    
    
    
    
    
    
    (14
    )
    
    
    (411
    )
    
    
    
    
    
    
    (9,887
    )
    
    
    (9,668
    )
    
    
    (33,700
    )
    
    
    188,000(233,558
    )
    
    
    (227,238
    )
    
    
    (70,427
    )
    
    
    (674,529
    )697,810
    
    
    
    (789,212
    )
    
    
    14,284
    
    
    
    6,147562,794
    
    
    
    870,688
    
    
    
    24,044
    
    
    
    12,066$
    1,260,604
    
    
    $
    81,476
    
    
    $
    38,328
    
    
    $
    18,213
 *
    
    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.
 7




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##### Table of Contents



Centex Corporation and Subsidiaries
 
 Notes to Consolidated Financial Statements
 September 30, 2008
   (A) SIGNIFICANT ACCOUNTING POLICIES
 Basis of Presentation
   
    
    Centex Corporation and Subsidiaries.This represents the consolidation of Centex,
Financial Services and all of their consolidated subsidiaries, related companies and
certain variable interest entities. The effects of transactions among related
companies within the consolidated group have been eliminated.
    
    Centex.This information is presented as supplemental information and represents the
consolidation of all subsidiaries and certain variable interest entities other than
those included in Financial Services, which are presented on an equity basis of
accounting.
    
    Financial Services.This information is presented as supplemental information and
represents Centex Financial Services, its subsidiaries and related companies.
   8




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##### Table of Contents



Interest Expense
  For the Three Months
    
    
    For the Six MonthsEnded September 30,
    
    
    Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Total Interest Incurred
    
    $
    52,838
    
    
    $
    76,086
    
    
    $
    114,590
    
    
    $
    158,437Less  Interest Capitalized
    
    
    (44,322
    )
    
    
    (59,507
    )
    
    
    (95,591
    )
    
    
    (121,370
    )Financial Services
Interest Expense
    
    
    (3,543
    )
    
    
    (16,579
    )
    
    
    (7,846
    )
    
    
    (37,067
    )Interest Expense, net
    
    $
    4,973
    
    
    $
    
    
    
    $
    11,153
    
    
    $
    Capitalized Interest Charged to HomeBuildings Costs and Expenses
    
    $
    27,232
    
    
    $
    96,698
    
    
    $
    52,767
    
    
    $
    139,764
 Income Taxes
      9




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##### Table of Contents



Stock-Based Employee Compensation Arrangements
  Number ofShares
    
    Fair ValuePeriod of Grant
    
    Grant Type
    
    Granted
    
    of GrantFor the year ended March 31, 2008
    
    Stock Options
    
    
    646.6
    
    
    $
    10,116.9Stock Units
    
    
    283.3
    
    
    $
    11,901.2Restricted Stock
    
    
    160.1
    
    
    $
    5,035.0For the six months ended
September 30, 2008
    
    Stock Options
    
    
    1,827.0
    
    
    $
    14,072.9Stock Units
    
    
    375.2
    
    
    $
    8,265.7Restricted Stock
    
    
    663.0
    
    
    $
    9,699.8
   Statements of Consolidated Cash Flows  Supplemental Disclosures
   For the Three Months
    
    
    For the Six MonthsEnded September 30,
    
    
    Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Cash Paid for Interest (1)
    
    $
    47,640
    
    
    $
    75,126
    
    
    $
    106,933
    
    
    $
    153,995Net Cash Paid (Refund) for Taxes
    
    $
    (726
    )
    
    $
    31,760
    
    
    $
    (625,831
    )
    
    $
    209,205
 (1)
    
    Amounts include capitalized interest.
  10




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##### Table of Contents



Recent Accounting Pronouncements
     Reclassifications
  11




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##### Table of Contents



(B) STOCKHOLDERS EQUITY
  Capital in
    
    
    
    
    
    
    TreasuryCommon Stock
    
    
    Excess of
    
    
    Retained
    
    
    Stock,Shares
    
    
    Amount
    
    
    Par Value
    
    
    Earnings
    
    
    at Cost
    
    
    TotalBalance, March 31, 2008
    
    
    123,279
    
    
    $
    31,763
    
    
    $
    95,088
    
    
    $
    2,365,634
    
    
    $
    (193,824
    )
    
    $
    2,298,661Issuance of Restricted Stock
and Stock Units
    
    
    965
    
    
    
    166
    
    
    
    (22,462
    )
    
    
    
    
    
    
    16,652
    
    
    
    (5,644
    )Stock Compensation
    
    
    
    
    
    
    
    
    
    
    14,266
    
    
    
    
    
    
    
    
    
    
    
    14,266Exercise of Stock Options
    
    
    37
    
    
    
    9
    
    
    
    531
    
    
    
    
    
    
    
    
    
    
    
    540Tax Shortfall from
Stock-Based Awards
    
    
    
    
    
    
    
    
    
    
    (2,526
    )
    
    
    
    
    
    
    
    
    
    
    (2,526
    )Cash Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,887
    )
    
    
    
    
    
    
    (9,887
    )Purchase of Common
Stock for Treasury
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14
    )
    
    
    (14
    )Other Stock Transactions
    
    
    5
    
    
    
    2
    
    
    
    82
    
    
    
    
    
    
    
    
    
    
    
    84Net Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (322,089
    )
    
    
    
    
    
    
    (322,089
    )Balance, September 30, 2008
    
    
    124,286
    
    
    $
    31,940
    
    
    $
    84,979
    
    
    $
    2,033,658
    
    
    $
    (177,186
    )
    
    $
    1,973,391
 (C) MORTGAGE LOANS RECEIVABLE AND REAL ESTATE OWNED
  As ofSeptember 30, 2008
    
    
    March 31, 2008Gross
    
    
    Allowance
    
    
    Net
    
    
    Gross
    
    
    Allowance
    
    
    NetMortgage Loans Held for Sale
    
    $
    330,299
    
    
    $
    (491
    )
    
    $
    329,808
    
    
    $
    388,385
    
    
    $
    (4,092
    )
    
    $
    384,293Other Mortgage Loans
    
    
    210,630
    
    
    
    (121,106
    )
    
    
    89,524
    
    
    
    283,191
    
    
    
    (151,604
    )
    
    
    131,587Mortgage Loans Receivable
    
    $
    540,929
    
    
    $
    (121,597
    )
    
    $
    419,332
    
    
    $
    671,576
    
    
    $
    (155,696
    )
    
    $
    515,880Real Estate Owned
    
    $
    24,436
    
    
    $
    (15,580
    )
    
    $
    8,856
    
    
    $
    23,635
    
    
    $
    (12,785
    )
    
    $
    10,850
  September 30, 2008
    
    
    March 31, 2008 (1)Balance at Beginning of Period
    
    $
    168,481
    
    
    $
    17,576Provision for Losses
    
    
    5,599
    
    
    
    176,109Charge-offs/Recoveries
    
    
    (36,903
    )
    
    
    (25,204
    )Balance at End of Period
    
    $
    137,177
    
    
    $
    168,481
 (1)
    
    For the six months ended September 30, 2007, provision for losses and
charge-offs/recoveries were $60,647 and $(4,798), respectively.
  12




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##### Table of Contents



(D) INVENTORIES
 Housing Projects
  As ofSeptember 30, 2008
    
    
    March 31, 2008Direct Construction
    
    $
    1,480,967
    
    
    $
    1,746,016Land Under Development
    
    
    2,406,475
    
    
    
    2,882,844Housing Projects
    
    $
    3,887,442
    
    
    $
    4,628,860
  Land Held Under Option Agreements Not Owned and Land Held for Development and Sale
     As ofSeptember 30, 2008
    
    
    March 31, 2008Cash Deposits included in:Land Held for Development and Sale
    
    $
    10,456
    
    
    $
    20,711Land Held Under Option Agreements Not Owned
    
    
    29,788
    
    
    
    33,230Total Cash Deposits in Inventory
    
    
    40,244
    
    
    
    53,941Letters of Credit
    
    
    1,006
    
    
    
    943Total Invested through Deposits or
Secured with Letters of Credit
    
    $
    41,250
    
    
    $
    54,884Total Purchase Price of Land Option Agreements
    
    $
    687,567
    
    
    $
    1,131,976
 13




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##### Table of Contents



(E) GOODWILL
  As of
    
    
    Goodwill
    
    
    As ofMarch 31, 2008
    
    
    Disposed
    
    
    September 30, 2008Home BuildingEast
    
    $
    30,594
    
    
    $
    
    
    
    $
    30,594Central
    
    
    9,671
    
    
    
    
    
    
    
    9,671West
    
    
    2,405
    
    
    
    
    
    
    
    2,405Other homebuilding
    
    
    
    
    
    
    
    
    
    
    -Total Home Building
    
    
    42,670
    
    
    
    
    
    
    
    42,670Financial Services
    
    
    8,952
    
    
    
    (3,588
    )(1)
    
    
    5,364Total
    
    $
    51,622
    
    
    $
    (3,588
    )
    
    $
    48,034
 (1)
    
    Represents disposal of goodwill related to the sale of Westwood Insurance Agency.
 (F) INDEBTEDNESS
  As ofSeptember 30, 2008
    
    
    March 31, 2008Centex:Senior Notes (unsecured):Senior Notes due August 2008 at 4.875%
    
    $
    
    
    
    $
    150,000Senior Notes due September 2009 at 5.8%
    
    
    210,920
    
    
    
    225,000Senior Notes due November 2010 at 4.55%
    
    
    300,000
    
    
    
    300,000Senior Notes due February 2011 at 7.875%
    
    
    392,493
    
    
    
    399,992Senior Notes due January 2012 at 7.5%
    
    
    324,276
    
    
    
    349,198Senior Notes due August 2012 at 5.45%
    
    
    295,000
    
    
    
    315,000Senior Notes due October 2013 at 5.125%
    
    
    300,000
    
    
    
    300,000Senior Notes due May 2014 at 5.7%
    
    
    350,000
    
    
    
    350,000Senior Notes due June 2015 at 5.25%
    
    
    450,000
    
    
    
    450,000Senior Notes due May 2016 at 6.5%
    
    
    480,000
    
    
    
    480,000Land Acquisition Notes and Other due through May
2017 (1)
    
    
    878
    
    
    
    5,977Total Senior Notes and Other
    
    
    3,103,567
    
    
    
    3,325,167Financial Services (secured):Mortgage Warehouse Facilities (2)
    
    
    300,326
    
    
    
    337,053Total Debt
    
    $
    3,403,893
    
    
    $
    3,662,220
 (1)
    
    Weighted average interest rates of 10.00% and 6.45% at September 30, 2008 and March
31, 2008, respectively.(2)
    
    Weighted average interest rates of 5.13% and 3.63% at September 30, 2008 and
March 31, 2008, respectively.
 14




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##### Table of Contents



For the Six Months Ended September 30,2008
    
    
    2007Centex:Senior Notes
    
    
    5.99
    %
    
    
    5.88
    %Land Acquisition Notes and Other
    
    
    9.04
    %
    
    
    6.71
    %Medium-term Note Programs
    
    
    
    
    
    
    5.68
    %Financial Services:Mortgage Warehouse Facilities
    
    
    5.01
    %
    
    
    5.92
    %Harwood Street Funding I, LLC Variable-RateSubordinated Extendable Certificates
    
    
    
    
    
    
    7.47
    %
  For the Fiscal Years EndingMarch 31,2009
    
    $
    462010
    
    
    211,0212011
    
    
    692,6052012
    
    
    324,4002013
    
    
    295,136Thereafter
    
    
    1,580,359$
    3,103,567
  Credit Facilities
  Existing Credit
    
    
    AvailableFacilities
    
    
    CapacityCentexMulti-Bank Revolving Credit FacilityRevolving Credit
    
    $
    750,000
    
    
    $
    644,980Letters of Credit
    
    
    600,000
    
    
    
    234,8851,350,000
    
    
    
    879,865Financial ServicesSecured Credit Facilities
    
    
    475,000
    
    
    
    174,674$
    1,825,000
    
    
    $
    1,054,539
  15




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##### Table of Contents



Funding of Mortgage Loans
      16




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##### Table of Contents



(G) COMMITMENTS AND CONTINGENCIES
 Joint Ventures
   As of September 30, 2008
    
    
    As of March 31, 2008Centex's
    
    
    
    
    
    
    
    
    
    
    Centex'sNumber
    
    
    
    
    
    
    Share
    
    
    Number
    
    
    
    
    
    
    Shareof JVs (1)
    
    
    Investments
    
    
    of Debt (2)
    
    

of JVs (1)
    
    
    Investments
    
    
    of Debt (2)Unleveraged Joint Ventures
    
    
    26
    
    
    $
    164,472
    
    
    $
    
    
    
    
    29
    
    
    $
    70,043
    
    
    $
    Joint Ventures with Debt:
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    13Limited Maintenance
Guarantee(3) (4)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,311
    
    
    
    27,500Repayment Guarantee(5)
    
    
    
    
    
    
    (253
    )
    
    
    14,297
    
    
    
    
    
    
    
    3,154
    
    
    
    13,692Completion Guarantee (4)
    
    
    
    
    
    
    45,669
    
    
    
    127,381
    
    
    
    
    
    
    
    78,274
    
    
    
    133,935No Recourse or Guarantee
    
    
    
    
    
    
    
    
    
    
    24,000
    
    
    
    
    
    
    
    12,040
    
    
    
    24,00037
    
    
    $
    209,888
    
    
    $
    165,678
    
    
    
    42
    
    
    $
    206,822
    
    
    $
    199,127
 (1)
    
    The number of joint ventures includes unconsolidated Home Building joint ventures for which
the Company has an investment balance as of the end of the period and/or current fiscal year
activity. The Company was the managing member of 22 and 23 of the active joint ventures as of
September 30, 2008 and March 31, 2008, respectively. The number of joint ventures includes 12
and 17 joint ventures as of September 30, 2008 and March 31, 2008, respectively, for which
substantially all of the joint ventures activities are complete.(2)
    
    Centexs share of debt represents the Companys maximum exposure related to the joint
ventures debt at each respective date.(3)
    
    The Company guaranteed that certain of the joint ventures would maintain a specified loan to
value ratio. For certain joint ventures, the Company contributed additional capital in order
to maintain loan to value requirements.(4)
    
    Certain joint venture agreements require the Company to guarantee the completion of a project
or phase if the joint venture does not perform the required land development. A portion of
these completion guarantees are joint and several with the Companys partners.(5)
    
    The Company has guaranteed repayment of a portion of certain joint venture debt limited to
its ownership percentage of the joint venture or a percentage thereof.
   17




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##### Table of Contents



For the Fiscal Years EndingMarch 31,2009
    
    $
    151,8502010
    
    
    4,4102011
    
    
    8,6632012
    
    
    755$
    165,678
 Letters of Credit and Surety Bonds
   As of September 30, 2008
    
    
    As of March 31, 2008Letters of Credit
    
    
    Surety Bonds
    
    
    Letters of Credit
    
    
    Surety BondsHome Building
    
    $
    131.9
    
    
    $
    1,167.8
    (1)
    
    $
    168.6
    
    
    $
    1,527.9Financial Services
    
    
    30.9
    
    
    
    10.1
    
    
    
    35.7
    
    
    
    12.3Other
    
    
    168.5
    
    
    
    0.2
    
    
    
    167.0
    
    
    
    0.2Discontinued
Operations
(2)
    
    
    34.7
    
    
    
    2,204.1
    
    
    
    35.3
    
    
    
    3,093.9$
    366.0
    
    
    $
    3,382.2
    
    
    $
    406.6
    
    
    $
    4,634.3
 (1)
    
    The Company estimates that $423.6 million of work remains to be performed on these
projects as of September 30, 2008.(2)
    
    After the sale of Construction Services, the Company remains responsible to a surety for
certain surety bond obligations relating to Construction Services projects commenced prior to
March 30, 2007. These surety bonds have a total face amount of $2.20 billion at September
30, 2008, although the risk of liability with respect to these surety bonds declines as the
relevant construction projects are performed. At September 30, 2008, the Company estimates
that $352.2 million of work remains to be performed on these projects. In connection with
certain of these surety bond obligations, the Company has provided a $100 million letter of
credit to such surety which is included in Other above. The purchaser of Construction
Services has agreed to indemnify the Company against losses relating to such surety bond
obligations, including amounts drawn under any such letter of credit. The Company has
purchased for its benefit an additional back-up indemnity provided by a financial institution
with an A (S&P) and A2 (Moodys) credit rating. The obligation of such financial institution
under the back-up indemnity is $400.0 million as of September 30, 2008 and will remain at
$400.0 million until termination in 2016.
 Community Development and Other Special District Obligations
  18




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##### Table of Contents



Warranties and Guarantees
    September 30, 2008
    
    
    March 31, 2008 (1)Balance at Beginning of Period
    
    $
    29,155
    
    
    $
    44,293Warranties Issued
    
    
    8,065
    
    
    
    27,858Settlements Made
    
    
    (9,244
    )
    
    
    (40,915
    )Changes in Liability of Pre-ExistingWarranties, Including Expirations
    
    
    (7,826
    )
    
    
    (2,081
    )Balance at End of Period
    
    $
    20,150
    
    
    $
    29,155
 (1)
    
    For the six months ended September 30, 2007, warranties issued, settlements made
and changes in liability of pre-existing warranties were $19,067, $(25,279) and
$(689), respectively.
  September 30, 2008
    
    
    March 31, 2008 (1)Balance at Beginning of Period
    
    $
    13,903
    
    
    $
    16,863Provision for Losses
    
    
    531
    
    
    
    1,676Settlements
    
    
    (4,873
    )
    
    
    (9,251
    )Changes in Pre-Existing Reserves
    
    
    15,736
    
    
    
    4,615Balance at End of Period
    
    $
    25,297
    
    
    $
    13,903
 (1)
    
    For the six months ended September 30, 2007, provisions for losses, settlements and
changes in pre-existing reserves were $908, $(5,890) and $1,800, respectively.
 Insurance Accruals
   19




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##### Table of Contents



Forward Trade and Interest Rate Lock Commitments
    Litigation and Related Matters
   (H) FAIR VALUES OF FINANCIAL INSTRUMENTS
  
    
    Level 1   Quoted prices in active markets for identical assets or liabilities.
    
    Level 2  Inputs other than quoted prices included within Level 1 that are observable
either directly or indirectly through corroboration with market data.
    
    Level 3  Unobservable inputs that reflect the Companys own estimates about the
assumptions market participants would use in pricing the asset or liability.
  20




---



##### Table of Contents



Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalAssetsMortgage Loans Held for Sale
    
    $
    
    
    
    $
    333,069
    
    
    $
    
    
    
    $
    333,069Forward Trade Commitments
(Interest Rate Lock Commitments)
    
    
    
    
    
    
    459
    
    
    
    
    
    
    
    459Servicing Asset
    
    
    
    
    
    
    17
    
    
    
    
    
    
    
    17Interest Rate Lock Commitments
    
    
    
    
    
    
    
    
    
    
    3,928
    
    
    
    3,928Total
    
    $
    
    
    
    $
    333,545
    
    
    $
    3,928
    
    
    $
    337,473LiabilitiesInterest Rate Swap Agreements
    
    $
    
    
    
    $
    5,700
    
    
    $
    
    
    
    $
    5,700Forward Trade Commitments
(Mortgage Loans Held for Sale)
    
    
    
    
    
    
    3,260
    
    
    
    
    
    
    
    3,260Total
    
    $
    
    
    
    $
    8,960
    
    
    $
    
    
    
    $
    8,960
   Interest RateLockCommitmentsBalance at beginning of period
    
    $
    9,271Purchases, issuances, and settlements
    
    
    (5,343
    )Loss included in earnings due to change in
valuation of items held
    
    
    -Fair value at September 30, 2008
    
    $
    3,928
   Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalAssetsOther Mortgage Loans
    
    $
    
    
    
    $
    
    
    
    $
    89,524
    
    
    $
    89,524
  21




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##### Table of Contents



(I) BUSINESS SEGMENTS
   East:
 Central:
 West:
 Other homebuilding (1)
 
 (1)
    
    Other homebuilding includes certain resort/second home projects in Florida that the
Company plans to build-out and liquidate, and holding companies. In addition, Other
homebuilding includes amounts consolidated under the caption land held under option
agreements not owned and capitalized interest for all regions.
    Home Building
  Financial Services
   22




---



##### Table of Contents



Other
   For the Three Months Ended
    
    
    For the Six Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Corporate General and
Administrative Expense
    
    $
    (53,435
    )
    
    $
    (34,540
    )
    
    $
    (112,074
    )
    
    $
    (79,521
    )Interest Expense
    
    
    (4,973
    )
    
    
    
    
    
    
    (11,153
    )
    
    
    Interest and Other Income
    
    
    5,285
    
    
    
    18,122
    
    
    
    12,393
    
    
    
    23,048$
    (53,123
    )
    
    $
    (16,418
    )
    
    $
    (110,834
    )
    
    $
    (56,473
    )
 Summary of the Companys Results of Operations by Segment
 For the Three Months Ended September 30,2008
    
    
    2007EarningsLoss
    
    
    Loss from
    
    
    
    
    
    
    (Loss)
    
    
    Loss fromfrom
    
    
    Continuing
    
    
    
    
    
    
    from
    
    
    ContinuingUnconsolidated
    
    
    Operations
    
    
    
    
    
    
    Unconsolidated
    
    
    OperationsEntities and
    
    
    Before
    
    
    
    
    
    
    Entities and
    
    
    BeforeRevenues
    
    
    Other
    
    
    Income Tax
    
    
    Revenues
    
    
    Other
    
    
    Income TaxHome BuildingEast
    
    $
    311,037
    
    
    $
    (8,652
    )
    
    $
    (46,462
    )
    
    $
    731,716
    
    
    $
    (30,063
    )
    
    $
    (137,533
    )Central
    
    
    295,809
    
    
    
    (3,807
    )
    
    
    (22,482
    )
    
    
    522,574
    
    
    
    291
    
    
    
    (33,258
    )West
    
    
    343,484
    
    
    
    (443
    )
    
    
    (41,906
    )
    
    
    794,448
    
    
    
    (7,068
    )
    
    
    (673,590
    )Other homebuilding
    
    
    2,266
    
    
    
    
    
    
    
    (3,914
    )
    
    
    56,746
    
    
    
    
    
    
    
    (108,312
    )Total Home Building
    
    
    952,596
    
    
    
    (12,902
    )
    
    
    (114,764
    )
    
    
    2,105,484
    
    
    
    (36,840
    )
    
    
    (952,693
    )Financial Services
    
    
    52,409
    
    
    
    
    
    
    
    (44,158
    )
    
    
    80,700
    
    
    
    
    
    
    
    (54,082
    )Other
    
    
    
    
    
    
    
    
    
    
    (53,123
    )
    
    
    
    
    
    
    
    
    
    
    (16,418
    )Total
    
    $
    1,005,005
    
    
    $
    (12,902
    )
    
    $
    (212,045
    )
    
    $
    2,186,184
    
    
    $
    (36,840
    )
    
    $
    (1,023,193
    )
 For the Six Months Ended September 30,2008
    
    
    2007EarningsLoss
    
    
    Loss from
    
    
    
    
    
    
    (Loss)
    
    
    Loss fromfrom
    
    
    Continuing
    
    
    
    
    
    
    from
    
    
    ContinuingUnconsolidated
    
    
    Operations
    
    
    
    
    
    
    Unconsolidated
    
    
    OperationsEntities and
    
    
    Before
    
    
    
    
    
    
    Entities and
    
    
    BeforeRevenues
    
    
    Other
    
    
    Income Tax
    
    
    Revenues
    
    
    Other
    
    
    Income TaxHome BuildingEast
    
    $
    619,076
    
    
    $
    (28,635
    )
    
    $
    (133,264
    )
    
    $
    1,294,533
    
    
    $
    (30,650
    )
    
    $
    (132,963
    )Central
    
    
    593,988
    
    
    
    (3,935
    )
    
    
    (35,952
    )
    
    
    971,151
    
    
    
    567
    
    
    
    (27,749
    )West
    
    
    772,671
    
    
    
    (629
    )
    
    
    (72,393
    )
    
    
    1,544,218
    
    
    
    (32,110
    )
    
    
    (818,546
    )Other homebuilding
    
    
    16,560
    
    
    
    
    
    
    
    (4,258
    )
    
    
    99,402
    
    
    
    
    
    
    
    (145,214
    )Total Home Building
    
    
    2,002,295
    
    
    
    (33,199
    )
    
    
    (245,867
    )
    
    
    3,909,304
    
    
    
    (62,193
    )
    
    
    (1,124,472
    )Financial Services
    
    
    128,832
    
    
    
    
    
    
    
    (38,091
    )
    
    
    178,666
    
    
    
    
    
    
    
    (39,113
    )Other
    
    
    
    
    
    
    
    
    
    
    (110,834
    )
    
    
    
    
    
    
    
    
    
    
    (56,473
    )Total
    
    $
    2,131,127
    
    
    $
    (33,199
    )
    
    $
    (394,792
    )
    
    $
    4,087,970
    
    
    $
    (62,193
    )
    
    $
    (1,220,058
    )
 23




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##### Table of Contents



For the Three Months Ended September 30,2008
    
    
    2007Goodwill
    
    
    Land-related
    
    
    Land-related
    
    
    Goodwill
    
    
    Land-related
    
    
    Land-relatedImpairments
    
    
    Impairments
    
    
    Write-offs
    
    
    Impairments
    
    
    Impairments
    
    
    Write-offsHome BuildingEast
    
    $
    
    
    
    $
    18,094
    
    
    $
    12,080
    
    
    $
    22,452
    
    
    $
    96,162
    
    
    $
    19,015Central
    
    
    
    
    
    
    19,007
    
    
    
    401
    
    
    
    4,339
    
    
    
    37,564
    
    
    
    8,915West
    
    
    
    
    
    
    32,626
    
    
    
    1,465
    
    
    
    34,531
    
    
    
    601,398
    
    
    
    10,386Other homebuilding
    
    
    
    
    
    
    7,163
    
    
    
    
    
    
    
    
    
    
    
    111,763
    
    
    
    2Total Home Building
    
    
    
    
    
    
    76,890
    
    
    
    13,946
    
    
    
    61,322
    
    
    
    846,887
    
    
    
    38,318Financial Services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    
    
    
    $
    76,890
    
    
    $
    13,946
    
    
    $
    61,322
    
    
    $
    846,887
    
    
    $
    38,318
 For the Six Months Ended September 30,2008
    
    
    2007Goodwill
    
    
    Land-related
    
    
    Land-related
    
    
    Goodwill
    
    
    Land-related
    
    
    Land-relatedImpairments
    
    
    Impairments
    
    
    Write-offs
    
    
    Impairments
    
    
    Impairments
    
    
    Write-offsHome BuildingEast
    
    $
    
    
    
    $
    52,968
    
    
    $
    17,262
    
    
    $
    22,452
    
    
    $
    103,577
    
    
    $
    29,423Central
    
    
    
    
    
    
    27,472
    
    
    
    2,414
    
    
    
    4,339
    
    
    
    41,847
    
    
    
    10,489West
    
    
    
    
    
    
    39,402
    
    
    
    4,371
    
    
    
    34,531
    
    
    
    701,097
    
    
    
    21,098Other homebuilding
    
    
    
    
    
    
    7,163
    
    
    
    
    
    
    
    
    
    
    
    142,958
    
    
    
    178Total Home Building
    
    
    
    
    
    
    127,005
    
    
    
    24,047
    
    
    
    61,322
    
    
    
    989,479
    
    
    
    61,188Financial Services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    
    
    
    $
    127,005
    
    
    $
    24,047
    
    
    $
    61,322
    
    
    $
    989,479
    
    
    $
    61,188
  As ofSeptember 30, 2008
    
    
    March 31, 2008Inventory
    
    
    Total Assets
    
    
    Inventory
    
    
    Total AssetsHome BuildingEast
    
    $
    2,163,117
    
    
    $
    2,481,430
    
    
    $
    2,357,273
    
    
    $
    2,631,144Central
    
    
    862,285
    
    
    
    901,089
    
    
    
    963,999
    
    
    
    1,007,937West
    
    
    1,309,626
    
    
    
    1,411,816
    
    
    
    1,701,506
    
    
    
    1,842,358Other homebuilding
    
    
    333,206
    
    
    
    1,124,055
    
    
    
    328,803
    
    
    
    1,128,285Total Home Building
    
    
    4,668,234
    
    
    
    5,918,390
    
    
    
    5,351,581
    
    
    
    6,609,724Financial Services
    
    
    8,856
    
    
    
    615,902
    
    
    
    10,850
    
    
    
    673,597Other (1)
    
    
    
    
    
    
    750,299
    
    
    
    
    
    
    
    757,022Discontinued Operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    96,989Total
    
    $
    4,677,090
    
    
    $
    7,284,591
    
    
    $
    5,362,431
    
    
    $
    8,137,332
 (1)
    
    The Companys Other segment includes cash, income taxes receivable and substantially all of
the Companys deferred income tax asset valuation allowance.
 24




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##### Table of Contents



(J) INCOME TAXES
          25




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##### Table of Contents



(K) DERIVATIVES AND HEDGING
     (L) DISCONTINUED OPERATIONS
  26




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##### Table of Contents



For the Six Months  EndedSeptember 30, 2008Sales and Related Proceeds, net of
Related Expenses
    
    $
    127,810Assets Sold
    
    
    (88,431
    )Pre-tax Gain on Sale
    
    
    39,379Income Tax Expense
    
    
    (20,282
    )Net Gain on Sale
    
    $
    19,097
    For the Three Months Ended
    
    
    For the Six Months EndedSeptember 30,
    
    
    September 30,2008(1)
    
    
    2007 (2)
    
    
    2008(1)
    
    
    2007 (2)Revenues
    
    $
    
    
    
    $
    34,744
    
    
    $
    
    
    
    $
    69,447Costs and Expenses
    
    
    
    
    
    
    (33,244
    )
    
    
    
    
    
    
    (66,739
    )Earnings Before Income Taxes
    
    
    
    
    
    
    1,500
    
    
    
    
    
    
    
    2,708Provision for Income Taxes
    
    
    
    
    
    
    572
    
    
    
    
    
    
    
    1,034Gain on Sale, net of Tax
    
    
    29,630
    
    
    
    
    
    
    
    48,643
    
    
    
    3,376$
    29,630
    
    
    $
    928
    
    
    $
    48,643
    
    
    $
    5,050
 (1)
    
    Includes the Companys home services operations and the gain from sale of Westwood
Insurance Agency.(2)
    
    Includes the Companys home services operations and Construction Services.
 (M) SUBSEQUENT EVENTS
   27




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Executive Summary
   For the Three Months Ended September 30,2008
    
    
    2007
    
    
    ChangeRevenuesHome Building
    
    $
    952,596
    
    
    $
    2,105,484
    
    
    
    (54.8
    %)Financial Services
    
    
    52,409
    
    
    
    80,700
    
    
    
    (35.1
    %)Total
    
    $
    1,005,005
    
    
    $
    2,186,184
    
    
    
    (54.0
    %)Loss from Continuing Operations
Before Income TaxesHome Building
    
    $
    (114,764
    )
    
    $
    (952,693
    )
    
    
    (88.0
    %)Financial Services
    
    
    (44,158
    )
    
    
    (54,082
    )
    
    
    (18.3
    %)Other
    
    
    (53,123
    )
    
    
    (16,418
    )
    
    
    223.6
    %Total
    
    $
    (212,045
    )
    
    $
    (1,023,193
    )
    
    
    (79.3
    %)
 For the Six Months Ended September 30,2008
    
    
    2007
    
    
    ChangeRevenuesHome Building
    
    $
    2,002,295
    
    
    $
    3,909,304
    
    
    
    (48.8
    %)Financial Services
    
    
    128,832
    
    
    
    178,666
    
    
    
    (27.9
    %)Total
    
    $
    2,131,127
    
    
    $
    4,087,970
    
    
    
    (47.9
    %)Loss from Continuing Operations
Before Income TaxesHome Building
    
    $
    (245,867
    )
    
    $
    (1,124,472
    )
    
    
    (78.1
    %)Financial Services
    
    
    (38,091
    )
    
    
    (39,113
    )
    
    
    (2.6
    %)Other
    
    
    (110,834
    )
    
    
    (56,473
    )
    
    
    96.3
    %Total
    
    $
    (394,792
    )
    
    $
    (1,220,058
    )
    
    
    (67.6
    %)
  28




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##### Table of Contents




    
    the current financial crisis affecting the banking system and financial
markets and related volatility in the capital and credit markets,
    
    declining homebuyer demand due to lower consumer confidence and an
inability of many homebuyers to sell their existing homes,
    
    elevated levels of new and existing homes for sale, including the impact
of increases in residential foreclosures,
    
    reduced availability and increased cost of mortgage financing due to the
significant mortgage market disruptions and tightened credit standards for homebuyers,
    
    pricing pressures resulting from a variety of factors, including the
decision of homebuilders to offer significant discounts and sales incentives to
liquidate unsold inventories in order to generate cash, and
    
    decreased affordability of housing in selected markets as a result of
significant price appreciation in the years preceding the downturn.
    
    
    $76.9 million and $127.0 million in land-related impairments,
    
    $12.0 million and $31.7 million in our share of joint ventures
impairments, and
    
    $13.9 million and $24.0 million in write-offs of land deposits and
pre-acquisition costs.
   29




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30




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HOME BUILDING
  For the Three Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeRevenues  Housing
    
    $
    939,888
    
    
    
    (54.5
    %)
    
    $
    2,063,999
    
    
    
    (20.7
    %)Revenues  Land Sales and Other
    
    
    12,708
    
    
    
    (69.4
    %)
    
    
    41,485
    
    
    
    (26.2
    %)Cost of Sales  Housing
    
    
    (798,956
    )
    
    
    (54.1
    %)
    
    
    (1,741,203
    )
    
    
    (11.5
    %)Cost of Sales  Land Sales and Other
    
    
    (109,521
    )
    
    
    (88.2
    %)
    
    
    (927,239
    )
    
    
    461.7
    %Selling, General and Administrative Expenses
    
    
    (148,856
    )
    
    
    (49.8
    %)
    
    
    (296,631
    )
    
    
    (21.0
    %)Goodwill Impairment
    
    
    
    
    
    
    (100.0
    %)
    
    
    (61,322
    )
    
    
    100.0
    %Loss from Unconsolidated Entities (1)
    
    
    (12,902
    )
    
    
    (65.0
    %)
    
    
    (36,840
    )
    
    
    545.6
    %Other Income
    
    
    2,875
    
    
    
    (43.2
    %)
    
    
    5,058
    
    
    
    7.0
    %Operating Loss(2)
    
    $
    (114,764
    )
    
    
    (88.0
    %)
    
    $
    (952,693
    )
    
    
    (740.5
    %)Operating
Loss as a Percentage of Revenues:Housing Operations (3)
    
    
    (0.8
    %)
    
    
    (2.1
    )
    
    
    1.3
    %
    
    
    (8.6
    )Total Homebuilding Operations
    
    
    (12.0
    %)
    
    
    33.2
    
    
    
    (45.2
    %)
    
    
    (50.8
    )
 For the Six Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeRevenues  Housing
    
    $
    1,972,079
    
    
    
    (48.6
    %)
    
    $
    3,838,737
    
    
    
    (25.7
    %)Revenues  Land Sales and Other
    
    
    30,216
    
    
    
    (57.2
    %)
    
    
    70,567
    
    
    
    (51.0
    %)Cost of Sales  Housing
    
    
    (1,709,082
    )
    
    
    (47.0
    %)
    
    
    (3,222,554
    )
    
    
    (16.0
    %)Cost of Sales  Land Sales and Other
    
    
    (197,783
    )
    
    
    (82.1
    %)
    
    
    (1,102,806
    )
    
    
    308.7
    %Selling, General and Administrative Expenses
    
    
    (315,071
    )
    
    
    (47.1
    %)
    
    
    (595,259
    )
    
    
    (20.9
    %)Goodwill Impairment
    
    
    
    
    
    
    (100.0
    %)
    
    
    (61,322
    )
    
    
    100.0
    %Loss from Unconsolidated Entities (1)
    
    
    (33,199
    )
    
    
    (46.6
    %)
    
    
    (62,193
    )
    
    NM*Other Income
    
    
    6,973
    
    
    
    (32.7
    %)
    
    
    10,358
    
    
    
    4.7
    %Operating Loss(2)
    
    $
    (245,867
    )
    
    
    (78.1
    %)
    
    $
    (1,124,472
    )
    
    
    (344.1
    %)Operating
Loss as a Percentage of Revenues:Housing Operations (3)
    
    
    (2.6
    %)
    
    
    (3.1
    )
    
    
    0.5
    %
    
    
    (10.7
    )Total Homebuilding Operations
    
    
    (12.3
    %)
    
    
    16.5
    
    
    
    (28.8
    %)
    
    
    (37.5
    )
 *
    
    NM = Not Meaningful(1)
    
    Loss from Unconsolidated Entities includes our share of joint ventures impairments.
 31




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##### Table of Contents



(2)
    
    Operating loss represents Home Building reporting segments earnings exclusive of certain
homebuilding corporate general and administrative expenses.(3)
    
    Operating loss from housing operations is a non-GAAP financial measure, which we believe is
useful to investors as it allows them to separate housing operations from activities related
to land holdings, options to acquire land and related land valuation adjustments. Management
uses this non-GAAP financial measure to aid in evaluating the performance of its ongoing
housing projects. Operating earnings from housing operations is equal to Housing Revenues
less Housing Cost of Sales and Selling, General and Administrative Expenses, all of which are
set forth in the table above.
  East:
 Central:
 West:
 Other homebuilding (1)
 (1)
    
    Other homebuilding includes certain resort/second home projects in Florida that we
plan to build-out and liquidate, and holding companies. In addition, Other
homebuilding includes amounts consolidated under the caption land held under option
agreements not owned and capitalized interest for all regions.
  For the Three Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeUnits ClosedEast
    
    
    1,118
    
    
    
    (53.9
    %)
    
    
    2,424
    
    
    
    (16.4
    %)Central
    
    
    1,595
    
    
    
    (42.5
    %)
    
    
    2,774
    
    
    
    (10.7
    %)West
    
    
    1,084
    
    
    
    (46.7
    %)
    
    
    2,035
    
    
    
    (13.1
    %)Other homebuilding
    
    
    
    
    
    
    (100.0
    %)
    
    
    117
    
    
    
    (33.9
    %)3,797
    
    
    
    (48.3
    %)
    
    
    7,350
    
    
    
    (13.8
    %)Average Revenue Per UnitEast
    
    $
    275,459
    
    
    
    (6.1
    %)
    
    $
    293,354
    
    
    
    (7.4
    %)Central
    
    $
    181,251
    
    
    
    (2.8
    %)
    
    $
    186,497
    
    
    
    West
    
    $
    316,263
    
    
    
    (18.6
    %)
    
    $
    388,516
    
    
    
    (13.3
    %)Other homebuilding
    
    $
    
    
    
    
    (100.0
    %)
    
    $
    384,043
    
    
    
    26.7
    %Total Home Building
    
    $
    247,534
    
    
    
    (11.9
    %)
    
    $
    280,816
    
    
    
    (8.0
    %)
 For the Six Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeUnits ClosedEast
    
    
    2,206
    
    
    
    (47.4
    %)
    
    
    4,192
    
    
    
    (25.9
    %)Central
    
    
    3,164
    
    
    
    (38.9
    %)
    
    
    5,181
    
    
    
    (15.9
    %)West
    
    
    2,330
    
    
    
    (39.4
    %)
    
    
    3,845
    
    
    
    (17.3
    %)Other homebuilding
    
    
    36
    
    
    
    (84.1
    %)
    
    
    227
    
    
    
    (38.5
    %)7,736
    
    
    
    (42.5
    %)
    
    
    13,445
    
    
    
    (20.2
    %)Average Revenue Per UnitEast
    
    $
    275,184
    
    
    
    (8.6
    %)
    
    $
    301,114
    
    
    
    (6.4
    %)Central
    
    $
    185,072
    
    
    
    (0.3
    %)
    
    $
    185,588
    
    
    
    (0.6
    %)West
    
    $
    329,387
    
    
    
    (17.4
    %)
    
    $
    399,002
    
    
    
    (10.9
    %)Other homebuilding
    
    $
    332,861
    
    
    
    (6.5
    %)
    
    $
    355,837
    
    
    
    18.1
    %Total Home Building
    
    $
    254,922
    
    
    
    (10.7
    %)
    
    $
    285,514
    
    
    
    (6.9
    %)
 32




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Revenues
    For the Three Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeAverage Operating Neighborhoods (1)
    
    
    523
    
    
    
    (20.5
    %)
    
    
    658
    
    
    
    (4.9
    %)Closings Per Average Neighborhood
    
    
    7.3
    
    
    
    (34.8
    %)
    
    
    11.2
    
    
    
    (8.9
    %)
 For the Six Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeAverage Operating Neighborhoods (1)
    
    
    546
    
    
    
    (18.1
    %)
    
    
    667
    
    
    
    (1.9
    %)Closings Per Average Neighborhood
    
    
    14.2
    
    
    
    (29.7
    %)
    
    
    20.2
    
    
    
    (18.5
    %)
 (1)
    
    We define a neighborhood as an individual active selling location targeted to a
specific buyer segment with greater than ten homes remaining to be sold.
  Operating Margins
  33




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##### Table of Contents



For the Three Months Ended September 30,2008
    
    
    2007Goodwill
    
    
    Land-related
    
    
    Land-related
    
    
    Goodwill
    
    
    Land-related
    
    
    Land-relatedImpairments
    
    
    Impairments
    
    
    Write-offs
    
    
    Impairments
    
    
    Impairments
    
    
    Write-offsEast
    
    $
    
    
    
    $
    18,094
    
    
    $
    12,080
    
    
    $
    22,452
    
    
    $
    96,162
    
    
    $
    19,015Central
    
    
    
    
    
    
    19,007
    
    
    
    401
    
    
    
    4,339
    
    
    
    37,564
    
    
    
    8,915West
    
    
    
    
    
    
    32,626
    
    
    
    1,465
    
    
    
    34,531
    
    
    
    601,398
    
    
    
    10,386Other homebuilding
    
    
    
    
    
    
    7,163
    
    
    
    
    
    
    
    
    
    
    
    111,763
    
    
    
    2$
    
    
    
    $
    76,890
    
    
    $
    13,946
    
    
    $
    61,322
    
    
    $
    846,887
    
    
    $
    38,318
 For the Six Months Ended September 30,2008
    
    
    2007Goodwill
    
    
    Land-related
    
    
    Land-related
    
    
    Goodwill
    
    
    Land-related
    
    
    Land-relatedImpairments
    
    
    Impairments
    
    
    Write-offs
    
    
    Impairments
    
    
    Impairments
    
    
    Write-offsEast
    
    $
    
    
    
    $
    52,968
    
    
    $
    17,262
    
    
    $
    22,452
    
    
    $
    103,577
    
    
    $
    29,423Central
    
    
    
    
    
    
    27,472
    
    
    
    2,414
    
    
    
    4,339
    
    
    
    41,847
    
    
    
    10,489West
    
    
    
    
    
    
    39,402
    
    
    
    4,371
    
    
    
    34,531
    
    
    
    701,097
    
    
    
    21,098Other homebuilding
    
    
    
    
    
    
    7,163
    
    
    
    
    
    
    
    
    
    
    
    142,958
    
    
    
    178$
    
    
    
    $
    127,005
    
    
    $
    24,047
    
    
    $
    61,322
    
    
    $
    989,479
    
    
    $
    61,188
   34




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##### Table of Contents



For the Three Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeCompensation and Benefits
    
    $
    63,685
    
    
    
    (42.9
    %)
    
    $
    111,556
    
    
    
    (31.3
    %)Sales Commissions
    
    
    41,233
    
    
    
    (57.0
    %)
    
    
    95,802
    
    
    
    (10.0
    %)Advertising and Marketing
    
    
    16,660
    
    
    
    (60.8
    %)
    
    
    42,489
    
    
    
    (12.9
    %)Other
    
    
    27,278
    
    
    
    (41.7
    %)
    
    
    46,784
    
    
    
    (19.2
    %)Selling, General and Administrative Expenses
    
    $
    148,856
    
    
    
    (49.8
    %)
    
    $
    296,631
    
    
    
    (21.0
    %)SG&A as a Percentage of Revenues
    
    
    15.6
    %
    
    
    1.5
    
    
    
    14.1
    %
    
    
    
 For the Six Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeCompensation and Benefits
    
    $
    137,132
    
    
    
    (41.4
    %)
    
    $
    234,158
    
    
    
    (31.3
    %)Sales Commissions
    
    
    90,694
    
    
    
    (50.1
    %)
    
    
    181,858
    
    
    
    (12.4
    %)Advertising and Marketing
    
    
    32,617
    
    
    
    (61.4
    %)
    
    
    84,428
    
    
    
    (12.4
    %)Other
    
    
    54,628
    
    
    
    (42.4
    %)
    
    
    94,815
    
    
    
    (12.2
    %)Selling, General and Administrative Expenses
    
    $
    315,071
    
    
    
    (47.1
    %)
    
    $
    595,259
    
    
    
    (20.9
    %)SG&A as a Percentage of Revenues
    
    
    15.7
    %
    
    
    0.5
    
    
    
    15.2
    %
    
    
    1.0Sales Orders, Average Cancellation Rates, Backlog Units and Land HoldingsFor each unit in backlog, we have received a signed customer contract and a customer deposit,
which is refundable under certain circumstances. The backlog units included in the table below are
net of cancellations. Cancellations occur for a variety of reasons, including a customers
inability to obtain financing, customer relocations or other customer financial hardships. The
following tables summarize sales orders, average cancellation rates and backlog units:For the Three Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeSales Orders (in Units)East
    
    
    1,059
    
    
    
    (38.6
    %)
    
    
    1,725
    
    
    
    (11.7
    %)Central
    
    
    1,075
    
    
    
    (54.6
    %)
    
    
    2,370
    
    
    
    (17.5
    %)West
    
    
    594
    
    
    
    (67.0
    %)
    
    
    1,801
    
    
    
    (9.5
    %)Other homebuilding
    
    
    
    
    
    
    (100.0
    %)
    
    
    57
    
    
    
    418.2
    %2,728
    
    
    
    (54.2
    %)
    
    
    5,953
    
    
    
    (12.8
    %)Sales Per Average Neighborhood
    
    
    5.2
    
    
    
    (42.2
    %)
    
    
    9.0
    
    
    
    (9.1
    %)
 35




---



##### Table of Contents



For the Six Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeSales Orders (in Units)East
    
    
    2,559
    
    
    
    (30.3
    %)
    
    
    3,672
    
    
    
    (16.1
    %)Central
    
    
    2,825
    
    
    
    (43.2
    %)
    
    
    4,974
    
    
    
    (20.9
    %)West
    
    
    1,526
    
    
    
    (58.7
    %)
    
    
    3,694
    
    
    
    (14.8
    %)Other homebuilding
    
    
    33
    
    
    
    (62.1
    %)
    
    
    87
    
    
    
    11.5
    %6,943
    
    
    
    (44.1
    %)
    
    
    12,427
    
    
    
    (17.6
    %)Sales Per Average Neighborhood
    
    
    12.7
    
    
    
    (31.7
    %)
    
    
    18.6
    
    
    
    (16.2
    %)
 For the Three Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeAverage Cancellation RatesEast
    
    
    31.9
    %
    
    
    3.0
    
    
    
    28.9
    %
    
    
    (7.3
    )Central
    
    
    45.3
    %
    
    
    10.0
    
    
    
    35.3
    %
    
    
    1.2West
    
    
    43.5
    %
    
    
    2.5
    
    
    
    41.0
    %
    
    
    (0.9
    )Other homebuilding
    
    
    
    
    
    
    (20.8
    )
    
    
    20.8
    %
    
    
    (60.6
    )Total Home Building
    
    
    40.3
    %
    
    
    4.9
    
    
    
    35.4
    %
    
    
    (2.0
    )
 For the Six Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeAverage Cancellation RatesEast
    
    
    26.0
    %
    
    
    (1.4
    )
    
    
    27.4
    %
    
    
    (4.9
    )Central
    
    
    38.4
    %
    
    
    5.0
    
    
    
    33.4
    %
    
    
    1.6West
    
    
    39.2
    %
    
    
    1.3
    
    
    
    37.9
    %
    
    
    (2.9
    )Other homebuilding
    
    
    5.7
    %
    
    
    (36.7
    )
    
    
    42.4
    %
    
    
    (6.3
    )Total Home Building
    
    
    34.4
    %
    
    
    1.1
    
    
    
    33.3
    %
    
    
    (1.6
    )
 As ofSeptember 30, 2008
    
    
    March 31, 2008Change
    
    
    
    
    
    ChangeBacklog UnitsEast
    
    
    2,801
    
    
    
    14.4
    %
    
    
    2,448
    
    
    
    (25.3
    %)Central
    
    
    2,616
    
    
    
    (11.5
    %)
    
    
    2,955
    
    
    
    (25.9
    %)West
    
    
    1,536
    
    
    
    (34.4
    %)
    
    
    2,340
    
    
    
    (26.3
    %)Other homebuilding
    
    
    
    
    
    
    (100.0
    %)
    
    
    3
    
    
    
    (98.6
    %)6,953
    
    
    
    (10.2
    %)
    
    
    7,746
    
    
    
    (27.3
    %)
   36




---



##### Table of Contents



As ofSeptember 30, 2008
    
    
    March 31, 2008Lots
    
    
    Lots
    
    
    
    
    
    
    Lots
    
    
    LotsOwned
    
    
    Controlled
    
    
    Total Lots
    
    
    Owned
    
    
    Controlled
    
    
    Total LotsEast
    
    
    32,532
    
    
    
    5,919
    
    
    
    38,451
    
    
    
    35,235
    
    
    
    8,551
    
    
    
    43,786Central
    
    
    17,223
    
    
    
    4,456
    
    
    
    21,679
    
    
    
    20,261
    
    
    
    6,349
    
    
    
    26,610West
    
    
    12,232
    
    
    
    1,491
    
    
    
    13,723
    
    
    
    13,634
    
    
    
    3,247
    
    
    
    16,881Other homebuilding
    
    
    1,324
    
    
    
    
    
    
    
    1,324
    
    
    
    1,092
    
    
    
    
    
    
    
    1,09263,311
    
    
    
    11,866
    
    
    
    75,177
    
    
    
    70,222
    
    
    
    18,147
    
    
    
    88,369Change
    
    
    (9.8
    %)
    
    
    (34.6
    %)
    
    
    (14.9
    %)
    
    
    (28.6
    %)
    
    
    (70.6
    %)
    
    
    (44.8
    %)
   37




---



##### Table of Contents



Regional Discussion
  For the Three Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeRevenuesEast
    
    $
    311,037
    
    
    
    (57.5
    %)
    
    $
    731,716
    
    
    
    (20.7
    %)Central
    
    
    295,809
    
    
    
    (43.4
    %)
    
    
    522,574
    
    
    
    (13.9
    %)West
    
    
    343,484
    
    
    
    (56.8
    %)
    
    
    794,448
    
    
    
    (25.2
    %)Other homebuilding
    
    
    2,266
    
    
    
    (96.0
    %)
    
    
    56,746
    
    
    
    (14.4
    %)$
    952,596
    
    
    
    (54.8
    %)
    
    $
    2,105,484
    
    
    
    (20.8
    %)Operating LossEast
    
    $
    (46,462
    )
    
    
    (66.2
    %)
    
    $
    (137,533
    )
    
    
    (246.5
    %)Central
    
    
    (22,482
    )
    
    
    (32.4
    %)
    
    
    (33,258
    )
    
    
    (228.0
    %)West
    
    
    (41,906
    )
    
    
    (93.8
    %)
    
    
    (673,590
    )
    
    NMOther homebuilding
    
    
    (3,914
    )
    
    
    (96.4
    %)
    
    
    (108,312
    )
    
    NM$
    (114,764
    )
    
    
    (88.0
    %)
    
    $
    (952,693
    )
    
    
    (740.5
    %)
 For the Six Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeRevenuesEast
    
    $
    619,076
    
    
    
    (52.2
    %)
    
    $
    1,294,533
    
    
    
    (30.0
    %)Central
    
    
    593,988
    
    
    
    (38.8
    %)
    
    
    971,151
    
    
    
    (18.6
    %)West
    
    
    772,671
    
    
    
    (50.0
    %)
    
    
    1,544,218
    
    
    
    (27.2
    %)Other homebuilding
    
    
    16,560
    
    
    
    (83.3
    %)
    
    
    99,402
    
    
    
    (30.3
    %)$
    2,002,295
    
    
    
    (48.8
    %)
    
    $
    3,909,304
    
    
    
    (26.3
    %)Operating LossEast
    
    $
    (133,264
    )
    
    
    0.2
    %
    
    $
    (132,963
    )
    
    
    (156.3
    %)Central
    
    
    (35,952
    )
    
    
    29.6
    %
    
    
    (27,749
    )
    
    
    (150.1
    %)West
    
    
    (72,393
    )
    
    
    (91.2
    %)
    
    
    (818,546
    )
    
    
    (655.4
    %)Other homebuilding
    
    
    (4,258
    )
    
    
    (97.1
    %)
    
    
    (145,214
    )
    
    
    (772.9
    %)$
    (245,867
    )
    
    
    (78.1
    %)
    
    $
    (1,124,472
    )
    
    
    (344.1
    %)
 East
   38




---



##### Table of Contents



Central
    39




---



##### Table of Contents



West
     40




---



##### Table of Contents



Other homebuilding
    FINANCIAL SERVICES
      41




---



##### Table of Contents



For the Three Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeRevenues
    
    $
    52,409
    
    
    
    (35.1
    %)
    
    $
    80,700
    
    
    
    (33.1
    %)Cost of Sales
    
    
    (3,543
    )
    
    
    (78.6
    %)
    
    
    (16,579
    )
    
    
    (23.8
    %)Selling, General and Administrative Expenses
    
    
    (93,024
    )
    
    
    (21.3
    %)
    
    
    (118,203
    )
    
    
    62.7
    %Operating Loss
    
    $
    (44,158
    )
    
    
    (18.3
    %)
    
    $
    (54,082
    )
    
    
    (306.7
    %)Operating Margin
    
    
    (84.3
    %)
    
    
    (17.3
    )
    
    
    (67.0
    %)
    
    
    (88.7
    )Net Interest Income
    
    $
    2,203
    
    
    
    (52.3
    %)
    
    $
    4,620
    
    
    
    (42.5
    %)Average Interest Earning Assets
    
    $
    377,193
    
    
    
    (66.3
    %)
    
    $
    1,119,100
    
    
    
    (26.2
    %)Average Yield
    
    
    6.09
    %
    
    
    (1.49
    )
    
    
    7.58
    %
    
    
    (0.28
    )Average Interest Bearing Liabilities
    
    $
    308,520
    
    
    
    (71.6
    %)
    
    $
    1,086,642
    
    
    
    (26.4
    %)Average Rate Paid
    
    
    4.82
    %
    
    
    (1.38
    )
    
    
    6.20
    %
    
    
    0.32
 For the Six Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeRevenues
    
    $
    128,832
    
    
    
    (27.9
    %)
    
    $
    178,666
    
    
    
    (26.6
    %)Cost of Sales
    
    
    (7,846
    )
    
    
    (78.8
    %)
    
    
    (37,067
    )
    
    
    (13.0
    %)Selling, General and Administrative Expenses
    
    
    (159,077
    )
    
    
    (12.0
    %)
    
    
    (180,712
    )
    
    
    19.3
    %Operating Loss
    
    $
    (38,091
    )
    
    
    (2.6
    %)
    
    $
    (39,113
    )
    
    
    (179.4
    %)Operating Margin
    
    
    (29.6
    %)
    
    
    (7.7
    )
    
    
    (21.9
    %)
    
    
    (42.1
    )Net Interest Income
    
    $
    4,355
    
    
    
    (57.2
    %)
    
    $
    10,172
    
    
    
    (38.6
    %)Average Interest Earning Assets
    
    $
    402,940
    
    
    
    (68.4
    %)
    
    $
    1,273,581
    
    
    
    (17.6
    %)Average Yield
    
    
    6.06
    %
    
    
    (1.36
    )
    
    
    7.42
    %
    
    
    (0.24
    )Average Interest Bearing Liabilities
    
    $
    344,343
    
    
    
    (72.2
    %)
    
    $
    1,238,094
    
    
    
    (18.0
    %)Average Rate Paid
    
    
    4.79
    %
    
    
    (1.28
    )
    
    
    6.07
    %
    
    
    0.42
  42




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##### Table of Contents



For the Three Months Ended September 30,2008
    
    
    2007Provision for Losses on
Mortgage Loans
    
    $
    (1,330
    )
    
    $
    55,409Provision for Real Estate Owned
    
    
    4,216
    
    
    
    2,269Anticipated Losses for Loans
Originated
    
    
    13,339
    
    
    
    2,125Total Provisions for Losses
    
    $
    16,225
    
    
    $
    59,803
 For the Six Months Ended September 30,2008
    
    
    2007Provision for Losses on
Mortgage Loans
    
    $
    (684
    )
    
    $
    58,086Provision for Real Estate Owned
    
    
    6,283
    
    
    
    2,561Anticipated Losses for Loans
Originated
    
    
    16,267
    
    
    
    2,708Total Provisions for Losses
    
    $
    21,866
    
    
    $
    63,355
  For the Three Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeLoan Sales to InvestorsVolume (in millions)
    
    $
    1,072.2
    
    
    
    (60.6
    %)
    
    $
    2,723.4
    
    
    
    13.7
    %Number of Loans Sold
    
    
    5,562
    
    
    
    (57.3
    %)
    
    
    13,025
    
    
    
    8.9
    %Gain on Sale of Mortgage Loans
    
    $
    16,500
    
    
    
    (46.3
    %)
    
    $
    30,732
    
    
    
    (22.9
    %)Loans Brokered to Third Party LendersVolume (in millions)
    
    $
    120.5
    
    
    
    (73.2
    %)
    
    $
    448.9
    
    
    
    (48.2
    %)Number of Brokered Loans
    
    
    396
    
    
    
    (69.4
    %)
    
    
    1,296
    
    
    
    (55.3
    %)Broker Fees
    
    $
    2,113
    
    
    
    (73.8
    %)
    
    $
    8,064
    
    
    
    (53.3
    %)Average Loan SizeLoans Sold to Investors
    
    $
    192,769
    
    
    
    (7.8
    %)
    
    $
    209,097
    
    
    
    4.4
    %Loans Brokered to Third Party
Lenders
    
    $
    304,660
    
    
    
    (12.0
    %)
    
    $
    346,041
    
    
    
    15.8
    %
 43




---



##### Table of Contents



For the Six Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeLoan Sales to InvestorsVolume (in millions)
    
    $
    2,680.3
    
    
    
    (47.2
    %)
    
    $
    5,076.7
    
    
    
    (3.3
    %)Number of Loans Sold
    
    
    13,655
    
    
    
    (42.8
    %)
    
    
    23,872
    
    
    
    (9.1
    %)Gain on Sale of Mortgage Loans
    
    $
    46,811
    
    
    
    (32.5
    %)
    
    $
    69,366
    
    
    
    (19.8
    %)Loans Brokered to Third Party LendersVolume (in millions)
    
    $
    300.5
    
    
    
    (71.3
    %)
    
    $
    1,046.7
    
    
    
    (42.6
    %)Number of Brokered Loans
    
    
    962
    
    
    
    (68.1
    %)
    
    
    3,015
    
    
    
    (50.9
    %)Broker Fees
    
    $
    5,288
    
    
    
    (71.8
    %)
    
    $
    18,721
    
    
    
    (47.8
    %)Average Loan SizeLoans Sold to Investors
    
    $
    196,284
    
    
    
    (7.7
    %)
    
    $
    212,664
    
    
    
    6.4
    %Loans Brokered to Third Party
Lenders
    
    $
    312,492
    
    
    
    (10.0
    %)
    
    $
    347,218
    
    
    
    16.8
    %
   For the Three Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeOpen Applications  Beginning
    
    
    14,992
    
    
    
    (21.0
    %)
    
    
    18,983
    
    
    
    (18.9
    %)New Applications
    
    
    33,078
    
    
    
    11.3
    %
    
    
    29,733
    
    
    
    30.9
    %Cancelled Applications
    
    
    (35,042
    )
    
    
    70.4
    %
    
    
    (20,570
    )
    
    
    95.5
    %Originated Loans
    
    
    (6,073
    )
    
    
    (49.6
    %)
    
    
    (12,047
    )
    
    
    (15.0
    %)Open Applications  Ending
    
    
    6,955
    
    
    
    (56.8
    %)
    
    
    16,099
    
    
    
    (24.9
    %)
 For the Six Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeOpen Applications  Beginning
    
    
    15,107
    
    
    
    (14.4
    %)
    
    
    17,648
    
    
    
    (24.0
    %)New Applications
    
    
    66,402
    
    
    
    15.9
    %
    
    
    57,282
    
    
    
    19.0
    %Cancelled Applications
    
    
    (60,196
    )
    
    
    73.0
    %
    
    
    (34,792
    )
    
    
    67.7
    %Originated Loans
    
    
    (14,358
    )
    
    
    (40.3
    %)
    
    
    (24,039
    )
    
    
    (17.5
    %)Open Applications  Ending
    
    
    6,955
    
    
    
    (56.8
    %)
    
    
    16,099
    
    
    
    (24.9
    %)
 44




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##### Table of Contents



For the Three Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeOrigination Volume (in millions)
    
    $
    1,217.2
    
    
    
    (54.7
    %)
    
    $
    2,686.9
    
    
    
    (20.0
    %)Number of Originated LoansBuilder
    
    
    2,979
    
    
    
    (45.3
    %)
    
    
    5,445
    
    
    
    (15.3
    %)Retail
    
    
    3,094
    
    
    
    (53.1
    %)
    
    
    6,602
    
    
    
    (14.7
    %)6,073
    
    
    
    (49.6
    %)
    
    
    12,047
    
    
    
    (15.0
    %)Average Loan Size  Originated Loans
    
    $
    200,431
    
    
    
    (10.1
    %)
    
    $
    223,000
    
    
    
    (5.9
    %)
 For the Six Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeOrigination Volume (in millions)
    
    $
    2,911.2
    
    
    
    (46.7
    %)
    
    $
    5,457.2
    
    
    
    (20.3
    %)Number of Originated LoansBuilder
    
    
    5,936
    
    
    
    (40.6
    %)
    
    
    9,986
    
    
    
    (20.1
    %)Retail
    
    
    8,422
    
    
    
    (40.1
    %)
    
    
    14,053
    
    
    
    (15.6
    %)14,358
    
    
    
    (40.3
    %)
    
    
    24,039
    
    
    
    (17.5
    %)Average Loan Size  Originated Loans
    
    $
    202,768
    
    
    
    (10.7
    %)
    
    $
    227,000
    
    
    
    (3.4
    %)
   OTHER
  For the Three Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeCorporate General and Administrative Expense
    
    $
    (53,435
    )
    
    
    54.7
    %
    
    $
    (34,540
    )
    
    
    (23.2
    %)Interest Expense
    
    
    (4,973
    )
    
    
    100.0
    %
    
    
    
    
    
    
    Other Income
    
    
    5,285
    
    
    
    (70.8
    %)
    
    
    18,122
    
    
    
    587.0
    %Operating Loss
    
    $
    (53,123
    )
    
    
    223.6
    %
    
    $
    (16,418
    )
    
    
    (61.2
    %)
 45




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##### Table of Contents



For the Six Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeCorporate General and Administrative Expense
    
    $
    (112,074
    )
    
    
    40.9
    %
    
    $
    (79,521
    )
    
    
    (20.3
    %)Interest Expense
    
    
    (11,153
    )
    
    
    100.0
    %
    
    
    
    
    
    
    Other Income
    
    
    12,393
    
    
    
    (46.2
    %)
    
    
    23,048
    
    
    
    786.8
    %Operating Loss
    
    $
    (110,834
    )
    
    
    96.3
    %
    
    $
    (56,473
    )
    
    
    (41.9
    %)
  For the Three Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeCompensation and Benefits
    
    $
    34,146
    
    
    
    20.1
    %
    
    $
    28,426
    
    
    
    (31.7
    %)Professional and Legal Costs
    
    
    10,757
    
    
    
    126.5
    %
    
    
    4,749
    
    
    
    12.7
    %Rent and Utilities
    
    
    2,218
    
    
    
    32.8
    %
    
    
    1,670
    
    
    
    8.0
    %Travel
    
    
    1,564
    
    
    
    13.7
    %
    
    
    1,375
    
    
    
    (31.3
    %)Other
    
    
    4,750
    
    
    
    (382.7
    %)
    
    
    (1,680
    )
    
    
    (61.6
    %)General and Administrative Expense
    
    $
    53,435
    
    
    
    54.7
    %
    
    $
    34,540
    
    
    
    (23.2
    %)
 For the Six Months Ended September 30,2008
    
    
    2007Change
    
    
    
    
    
    ChangeCompensation and Benefits
    
    $
    66,274
    
    
    
    0.8
    %
    
    $
    65,740
    
    
    
    (29.9
    %)Professional and Legal Costs
    
    
    26,535
    
    
    
    235.2
    %
    
    
    7,917
    
    
    
    5.9
    %Rent and Utilities
    
    
    4,637
    
    
    
    38.7
    %
    
    
    3,344
    
    
    
    14.6
    %Travel
    
    
    2,761
    
    
    
    5.7
    %
    
    
    2,611
    
    
    
    (36.2
    %)Other
    
    
    11,867
    
    
    
    NM
    

    
    
    (91
    )
    
    
    (98.9
    %)General and Administrative Expense
    
    $
    112,074
    
    
    
    40.9
    %
    
    $
    79,521
    
    
    
    (20.3
    %)
  INCOME TAXES
  DISCONTINUED OPERATIONS
  46




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For the Three Months Ended September 30,
    
    
    For the Six Months Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenues
    
    $
    
    
    
    $
    34,744
    
    
    $
    
    
    
    $
    69,447Operating Income
    
    $
    
    
    
    $
    1,500
    
    
    $
    
    
    
    $
    2,708Pre-tax Gain on Sale
    
    $
    135
    
    
    $
    
    
    
    $
    39,379
    
    
    $
    
   47




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##### Table of Contents



FINANCIAL CONDITION AND LIQUIDITY
  For the Six Months Ended September 30,2008
    
    
    2007Net Cash Provided by (Used in)Centex*Operating Activities
    
    $
    812,601
    
    
    $
    (319,090
    )Investing Activities
    
    
    118,767
    
    
    
    (242,884
    )Financing Activities
    
    
    (233,558
    )
    
    
    (227,238
    )697,810
    
    
    
    (789,212
    )Financial ServicesOperating Activities
    
    
    (3,114
    )
    
    
    647,270Investing Activities
    
    
    87,825
    
    
    
    33,406Financing Activities
    
    
    (70,427
    )
    
    
    (674,529
    )14,284
    
    
    
    6,147Centex Corporation and SubsidiariesOperating Activities
    
    
    811,106
    
    
    
    319,419Investing Activities
    
    
    171,273
    
    
    
    (12,717
    )Financing Activities
    
    
    (270,285
    )
    
    
    (1,089,767
    )Net Increase (Decrease) in Cash
    
    $
    712,094
    
    
    $
    (783,065
    )
 *
    
    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 and related
companies operate in a distinctly different financial environment, and Centex has limited
obligations with respect to the indebtedness of our Financial Services subsidiaries and
related companies. 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.
  Centex
   Financial Services
  48




---



##### Table of Contents



Discontinued Operations
  Credit Facilities and Liquidity
  Existing Credit
    
    
    AvailableFacilities
    
    
    CapacityCentexMulti-Bank Revolving Credit FacilityRevolving Credit
    
    $
    750,000
    
    
    $
    644,980Letters of Credit
    
    
    600,000
    
    
    
    234,8851,350,000
    
    
    
    879,865Financial ServicesSecured Credit Facilities
    
    
    475,000
    
    
    
    174,674$
    1,825,000
    
    
    $
    1,054,539
  49




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##### Table of Contents



CentexSenior Debt:Senior Notes, weighted-average 6.04%, due through 2017
    
    $
    3,102,689Land Acquisition Notes and Other, weighted-average 10.00%, due through 2018
    
    
    8783,103,567Financial ServicesMortgage Warehouse Facilities, weighted-average 5.13%
    
    
    300,326$
    3,403,893
  Debt Type
    
    
    AmountSenior Notes (1)
    
    $
    (216,501
    )Land Acquisition Notes and Other
    
    
    (1,049
    )$
    (217,550
    )
 (1)
    
    Amount includes $155 of debt discount amortization.
   Required Level
    
    
    Actual LevelLeverage Ratio
    
    
    50.0
    %
    
    
    42.3
    %Excess Tangible Net Worth
    
    Greater than $0
    
    $
    573,075Excess Borrowing Base
    
    Greater than $0
    
    $
    644,980
    50




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##### Table of Contents



CERTAIN OFF-BALANCE SHEET OBLIGATIONS
  Joint Ventures
   51




---



##### Table of Contents



As of September 30, 2008
    
    
    As of March 31, 2008Centex's
    
    
    
    
    
    
    
    
    
    
    Centex'sNumber
    
    
    
    
    
    
    Share
    
    
    Number
    
    
    
    
    
    
    Shareof JVs (1)
    
    
    Investments
    
    
    of Debt (2)
    
    
    of JVs (1)
    
    
    Investments
    
    
    of Debt (2)Unleveraged Joint Ventures
    
    
    26
    
    
    $
    164,472
    
    
    $
    
    
    
    
    29
    
    
    $
    70,043
    
    
    $
    Joint Ventures with Debt:
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    13Limited Maintenance
Guarantee (3) (4)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,311
    
    
    
    27,500Repayment Guarantee(5)
    
    
    
    
    
    
    (253
    )
    
    
    14,297
    
    
    
    
    
    
    
    3,154
    
    
    
    13,692Completion Guarantee (4)
    
    
    
    
    
    
    45,669
    
    
    
    127,381
    
    
    
    
    
    
    
    78,274
    
    
    
    133,935No Recourse or Guarantee
    
    
    
    
    
    
    
    
    
    
    24,000
    
    
    
    
    
    
    
    12,040
    
    
    
    24,00037
    
    
    $
    209,888
    
    
    $
    165,678
    
    
    
    42
    
    
    $
    206,822
    
    
    $
    199,127
 (1)
    
    The number of joint ventures includes unconsolidated Home Building joint ventures for
which we have an investment balance as of the end of the period and/or current fiscal year
activity. We were the managing member of 22 and 23 of the active joint ventures as of
September 30, 2008 and March 31, 2008, respectively. The number of joint ventures includes
12 and 17 joint ventures as of September 30, 2008 and March 31, 2008, respectively, for which
substantially all of the joint ventures activities are complete.(2)
    
    Centexs share of debt represents our maximum exposure related to the joint ventures debt
at each respective date.(3)
    
    We guaranteed that certain of the joint ventures would maintain a specified loan to value
ratio. For certain joint ventures, we contributed additional capital in order to maintain
loan to value requirements.(4)
    
    Certain joint venture agreements require us to guarantee the completion of a project or
phase if the joint venture does not perform the required land development. A portion of
these completion guarantees are joint and several with our partners.(5)
    
    We have guaranteed repayment of a portion of certain joint venture debt limited to our
ownership percentage of the joint venture or a percentage thereof.
    For the Fiscal Years EndingMarch 31,2009
    
    $
    151,8502010
    
    
    4,4102011
    
    
    8,6632012
    
    
    755$
    165,678
 52




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##### Table of Contents



CRITICAL ACCOUNTING ESTIMATES
  Mortgage Loan Allowances and Related Reserve
      Inventory Valuation
  53




---



##### Table of Contents




    
    estimates of average future selling prices,
    
    estimates of future construction and land development costs, and
    
    estimated future sales rates.
  
    
    historical project results such as average sales price and sales rates, if closings
have occurred in the project,
    
    competitors local market (or neighborhood) presence and their competitive actions,
    
    project specific attributes such as location desirability and uniqueness of product
offering,
    
    potential for alternative product offerings to respond to local market conditions,
and
    
    current local market economic and demographic conditions and related trends and
forecasts.
  
    
    geographic location of project,
    
    product type (for example, multifamily high rise product or single family product),
    
    average sales price of the product, and
    
    estimated project life.
   Land Held Under Option Agreements Not Owned and Other Land Deposits
   54




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##### Table of Contents




    
    local market housing inventory levels for both existing and new homes,
    
    our existing local supply of owned and controlled lots,
    
    contract purchase price and terms,
    
    local regulatory environment and, if not fully entitled, likelihood of
obtaining required approvals, and
    
    local market economic and demographic factors such as job growth, long-
and short-term interest rates, consumer confidence, population growth and immigration.
 Goodwill
    Warranty Accruals
  55




---



##### Table of Contents



Insurance Accruals
  Income Taxes
     RECENT ACCOUNTING PRONOUNCEMENTS
  56




---



##### Table of Contents



57




---



##### Table of Contents



SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
 This report includes various forward-looking statements, which are not facts or guarantees of
future performance and which are subject to significant risks and uncertainties.
   10-K,
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  58




---



##### Table of Contents



Item 4. Controls and Procedures
  59




---



##### Table of Contents



PART II  INFORMATION
 
 Item 1. Legal Proceedings
   
 Item 1A. Risk Factors
   The homebuilding industry is undergoing a significant downturn; this downturn has had a material
adverse effect on our business and results of operations and is expected to continue.
  
    
    the current financial crisis affecting the banking system and financial
markets and related volatility in the capital and credit markets,
    
    declining homebuyer demand due to lower consumer confidence and an
inability of many homebuyers to sell their existing homes resulting in part from
unfavorable general economic conditions leading to concerns about whether the economy
is in a recession,
    
    elevated levels of new and existing homes for sale, including the impact
of increases in residential foreclosures, which may increase if unemployment increases,
    
    reduced availability and increased cost of mortgage financing due to the
significant mortgage market disruptions, tightened credit standards for homebuyers, and
the elimination of down payment assistance programs, and
    
    pricing pressures resulting from a variety of factors, including the
decision of homebuilders to offer significant discounts and sales incentives to
liquidate unsold inventories in order to generate cash.
  Increases in interest rates, decreases in the availability of mortgage financing or other changes
in market conditions could make it more difficult or costly for customers to purchase our homes.
  60




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##### Table of Contents



Our results of operations are subject to significant changes in the cost of raw materials and other
components of our houses and labor that are dependent on or impacted by increases in energy costs.
   General business, economic and market conditions may significantly affect the results of operations
of our Financial Services operations.
    Current levels of volatility in the capital and credit markets are unprecedented.
  61




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##### Table of Contents



We cannot yet predict the impact of the U.S. governments recently enacted plan to purchase large
amounts of illiquid, mortgage-backed and other securities from financial institutions, or other
government initiatives, on the financial markets.
   We could be adversely affected by a change in our credit rating.
   62




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##### Table of Contents



Changes in laws or other events that adversely affect liquidity in the secondary mortgage market
could hurt our business.
  We may not realize our net deferred tax assets.
    Outstanding Common Stock and Other Securities
 Our share price will fluctuate.
  
    
    operating results that vary from the expectations of securities analysts and investors;
 
    
    factors influencing home purchases, such as availability of home mortgage loans and
interest rates, credit criteria applicable to prospective borrowers, ability to sell
existing residences, and homebuyer sentiment in general;
 
    
    the operating and securities price performance of companies that investors
consider to be comparable to us;
 
    
    announcements of strategic developments, acquisitions and other material events by us or
our competitors; and
 
    
    changes in global financial markets and global economies and general market conditions,
such as interest rates, commodity and equity prices and the value of financial assets.
 63




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##### Table of Contents



Dividends on our common stock have been suspended and future dividends remain uncertain.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 Share Repurchases
  Issuer Purchases of Equity SecuritiesTotal Number of
    
    
    Maximum Number ofTotal Number
    
    
    
    
    
    Shares Purchased
    
    
    Shares that May Yet Beof Shares
    
    
    Average Price
    
    
    as Part of Publicly
    
    
    Purchased Under thePurchased
    
    

Paid Per Share
    
    
    Announced Plans
    
    
    PlansPeriodJuly 1-31
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    9,399,700August 1-31
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    9,399,700September 1-30
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    9,399,700Total
    
    
    
    
    
    $
    
    
    
    
    
  
 Item 4. Submission of Matters to a Vote of Security Holders
   Number of SharesFor
    
    
    Withheld
    
    
    Broker Non-VotesBarbara T. Alexander
    
    
    106,447,649
    
    
    
    1,847,795
    
    
    
    Timothy R. Eller
    
    
    106,148,782
    
    
    
    2,146,662
    
    
    
    James J. Postl
    
    
    106,469,708
    
    
    
    1,825,736
    
    
    
    
  64




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##### Table of Contents



Number of SharesFor
    
    Against
    
    Abstained
    
    Broker Non-Votes107,431,108
    
    52,355
    
    811,981
    
    
  Number of SharesFor
    
    Against
    
    Abstained
    
    Broker Non-Votes106,712,760
    
    750,973
    
    831,711
    
    
  Number of SharesFor
    
    Against
    
    Abstained
    
    Broker Non-Votes95,700,176
    
    11,706,000
    
    889,267
    
    
  Number of SharesFor
    
    Against
    
    Abstained
    
    Broker Non-Votes96,937,007
    
    10,473,752
    
    884,685
    
    
  Number of SharesFor
    
    Against
    
    Abstained
    
    Broker Non-Votes86,838,353
    
    11,064,292
    
    854,855
    
    9,537,944
  Number of SharesFor
    
    Against
    
    Abstained
    
    Broker Non-Votes16,466,850
    
    46,642,451
    
    35,648,199
    
    9,537,944
  Number of SharesFor
    
    Against
    
    Abstained
    
    Broker Non-Votes80,471,884
    
    17,333,889
    
    951,727
    
    9,537,944
 65




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##### Table of Contents



Item 6. Exhibits
  3.1
    
    Amended and Restated Articles of Incorporation of Centex
Corporation (Centex) (incorporated by reference from Exhibit 3.1 to Centexs
Current Report on Form 8-K filed on July 15, 2008).3.2
    
    Amended and Restated By-Laws of Centex dated October 8, 2008
(incorporated by reference from Exhibit 3.1 to Centexs Current Report on Form
8-K filed on October 14, 2008).4.1
    
    Specimen Centex common stock certificate (incorporated by
reference from Exhibit 4.1 to Centexs Quarterly Report on
Form 10-Q for the
quarter ended September 30, 2006).4.2
    
    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, 2008, 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 indentures or other agreements in connection
with certain asset securitizations involving certain subsidiaries of Centex in
private transactions and (c) other long-term debt of Centex; Centex agrees to
furnish a copy of such instruments to the SEC upon request.10.1
    
    Centex Corporation 2003 Annual Incentive Compensation Plan* (as amended through May 7, 2008, including amendments approved by stockholders on
July 10, 2008) (incorporated by reference from Exhibit 10.1 to Centexs Current
Report on Form 8-K filed on July 15, 2008).10.2
    
    Centex Corporation 2003 Equity Incentive Plan* (as amended through May 7, 2008, including amendments approved by stockholders on July 10,
2008) (incorporated by reference from Exhibit 10.2 to Centexs Current Report on
Form 8-K filed on July 15, 2008).10.2a
    
    Centex Corporation 2003 Equity Incentive Plan* (as amended through October 8, 2008) (filed herewith).10.2b
    
    Form of restricted stock award under 2003 Equity Incentive Plan*
(management awards) (incorporated by reference from Exhibit 10.3 to Centexs
Current Report on Form 8-K filed on July 15, 2008).10.2c
    
    Form of restricted stock award under 2003 Equity Incentive Plan*
(August 2008 non-employee director award) (filed herewith).10.2d
    
    Form of stock option award for 2003 Equity Incentive Plan*
(August 2008 non-employee director award) (filed herewith).10.3
    
    Amended and Restated Executive Severance Policy* (incorporated by
reference from Exhibit 10.1 to Centexs Current Report on Form 8-K filed on
October 14, 2008).10.4
    
    Form of Amendment to Change of Control Agreement* (incorporated
by reference from Exhibit 10.2 to Centexs Current Report on Form 8-K filed on
October 14, 2008).10.5
    
    Amendments to form of long-term performance unit award for 2003
Equity Incentive Plan (May 2007 award)* (incorporated by reference from Exhibit
10.3 to Centexs Current Report on Form 8-K filed on October 14, 2008).
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10.6
    
    Amendment No. 2 to Centex Comprehensive Medical Plan*
(incorporated by reference from Exhibit 10.4 to Centexs Current Report on Form
8-K filed on October 14, 2008).12.1
    
    Computation of Ratio of Earnings to Fixed Charges (filed
herewith).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 (filed herewith).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 (filed herewith).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 (filed herewith).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 (filed herewith).*
    
    Management contract or compensatory plan or arrangement.
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##### Table of Contents



Signatures
  CENTEX CORPORATIONRegistrantNovember 4, 2008
    
    /s/ Catherine R. SmithCatherine R. SmithExecutive Vice President and Chief Financial Officer(principal financial officer)November 4, 2008
    
    /s/ Mark D. KempMark D. KempSenior Vice President and Controller(principal accounting officer)
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