##### 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
JUNE 30, 2007
 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
 ü
 ü




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##### 



Centex Corporation and Subsidiaries
  
 Form 10-Q Table of Contents
 June 30, 2007
 PART I  FINANCIAL INFORMATIONItem 1.
    
    Financial Statements
    
    
    1Statements of Consolidated Earnings
    
    
    1Consolidated Balance Sheets with Consolidating Details
    
    
    2Statements of Consolidated Cash Flows with Consolidating Details
    
    
    4Notes to Consolidated Financial Statements
    
    
    6Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    25Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    47Item 4.
    
    Controls and Procedures
    
    
    47PART II  OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    48Item 1A.
    
    Risk Factors
    
    
    48Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    49Item 6.
    
    Exhibits
    
    
    49Signatures
    
    
    51Computation of Ratio of Earnings to Fixed ChargesCertification of the CEOCertification of the CFOCertification of the CEOCertification of the CFO
  i




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 Centex Corporation and Subsidiaries
 
 Statements of Consolidated Earnings
 
 For the Three Months Ended June 30,2007
    
    
    2006RevenuesHome Building
    
    $
    1,803,820
    
    
    $
    2,649,837Financial Services
    
    
    97,966
    
    
    
    122,741Other
    
    
    39,629
    
    
    
    31,3221,941,415
    
    
    
    2,803,900Costs and ExpensesHome Building
    
    
    1,955,546
    
    
    
    2,348,592Financial Services
    
    
    82,997
    
    
    
    99,654Other
    
    
    33,495
    
    
    
    33,089Corporate General and Administrative
    
    
    44,981
    
    
    
    54,7702,117,019
    
    
    
    2,536,105Earnings (Loss) from Unconsolidated Entities
    
    
    (20,053
    )
    
    
    10,668Earnings (Loss) from Continuing Operations
Before Income Taxes
    
    
    (195,657
    )
    
    
    278,463Income Tax (Benefit) Provision
    
    
    (64,322
    )
    
    
    106,035Earnings (Loss) from Continuing Operations
    
    
    (131,335
    )
    
    
    172,428Earnings (Loss) from Discontinued Operations, net of Tax
Provision (Benefit) of $2,087 and $(7,413)
    
    
    3,376
    
    
    
    (12,171
    )Net Earnings (Loss)
    
    $
    (127,959
    )
    
    $
    160,257Basic Earnings (Loss) Per ShareContinuing Operations
    
    $
    (1.08
    )
    
    $
    1.41Discontinued Operations
    
    
    0.03
    
    
    
    (0.10
    )$
    (1.05
    )
    
    $
    1.31Diluted Earnings (Loss) Per ShareContinuing Operations
    
    $
    (1.08
    )
    
    $
    1.37Discontinued Operations
    
    
    0.03
    
    
    
    (0.10
    )$
    (1.05
    )
    
    $
    1.27Average Shares OutstandingBasic
    
    
    121,469,951
    
    
    
    121,969,085Dilutive Securities:Options
    
    
    
    
    
    
    4,216,749Other
    
    
    
    
    
    
    47,635Diluted
    
    
    121,469,951
    
    
    
    126,233,469Cash Dividends Per Share
    
    $
    0.04
    
    
    $
    0.04
 See Notes to Consolidated Financial Statements.
 1




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##### Table of Contents



Centex
Corporation and Subsidiaries
 
 Consolidated Balance Sheets with Consolidating Details
 
 Centex Corporation and SubsidiariesJune 30, 2007
    
    
    March 31, 2007AssetsCash and Cash Equivalents
    
    $
    233,244
    
    
    $
    882,754Restricted Cash
    
    
    147,020
    
    
    
    146,532Receivables -Mortgage Loans
    
    
    1,474,243
    
    
    
    1,688,303Trade, including Notes of $9,469 and $10,295
    
    
    186,909
    
    
    
    227,618From Affiliates
    
    
    
    
    
    
    Inventories -Housing Projects
    
    
    8,511,820
    
    
    
    8,495,982Land Held for Development and Sale
    
    
    159,504
    
    
    
    158,212Land Held Under Option Agreements Not Owned
    
    
    207,558
    
    
    
    282,116Other
    
    
    15,820
    
    
    
    14,769Investments -Joint Ventures and Other
    
    
    273,872
    
    
    
    281,644Unconsolidated Subsidiaries
    
    
    
    
    
    
    Property and Equipment, net
    
    
    126,453
    
    
    
    136,172Other Assets -Deferred Income Taxes
    
    
    666,741
    
    
    
    489,814Goodwill
    
    
    221,640
    
    
    
    219,042Deferred Charges and Other, net
    
    
    220,154
    
    
    
    176,975$
    12,444,978
    
    
    $
    13,199,933Liabilities and Stockholders EquityAccounts Payable
    
    $
    433,704
    
    
    $
    520,833Accrued Liabilities
    
    
    1,764,382
    
    
    
    1,822,429Debt -Centex
    
    
    3,849,354
    
    
    
    3,904,425Financial Services
    
    
    1,456,554
    
    
    
    1,663,040Commitments and ContingenciesMinority Interests
    
    
    147,681
    
    
    
    176,937Stockholders Equity -Preferred Stock: Authorized 5,000,000 Shares, None
Issued
    
    
    
    
    
    
    Common Stock: $.25 Par Value; Authorized 300,000,000
Shares; Outstanding 120,883,223 and 119,969,733
Shares
    
    
    31,254
    
    
    
    31,041Capital in Excess of Par Value
    
    
    66,777
    
    
    
    48,349Retained Earnings
    
    
    4,909,794
    
    
    
    5,250,873Treasury Stock, at Cost; 4,133,425 and 4,193,523 Shares
    
    
    (214,522
    )
    
    
    (217,994
    )Total Stockholders Equity
    
    
    4,793,303
    
    
    
    5,112,269$
    12,444,978
    
    
    $
    13,199,933
 See Notes to Consolidated Financial Statements.
 2




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##### Table of Contents



Centex Corporation and Subsidiaries
Consolidated Balance Sheets with Consolidating Details
 
 Centex*
    
    

Financial ServicesJune 30, 2007
    
    
    March 31, 2007
    
    
    June 30, 2007
    
    
    March 31, 2007$
    228,568
    
    
    $
    870,688
    
    
    $
    4,676
    
    
    $
    12,06659,136
    
    
    
    56,467
    
    
    
    87,884
    
    
    
    90,065
    
    
    
    
    
    
    
    1,474,243
    
    
    
    1,688,303131,866
    
    
    
    175,683
    
    
    
    55,043
    
    
    
    51,935
    
    
    
    
    
    
    
    2,060
    
    
    
    23,7888,511,820
    
    
    
    8,495,982
    
    
    
    
    
    
    
    159,504
    
    
    
    158,212
    
    
    
    
    
    
    
    207,558
    
    
    
    282,116
    
    
    
    
    
    
    
    5,915
    
    
    
    6,022
    
    
    
    9,905
    
    
    
    8,747273,872
    
    
    
    281,644
    
    
    
    
    
    
    
    153,687
    
    
    
    137,704
    
    
    
    
    
    
    
    110,991
    
    
    
    119,203
    
    
    
    15,462
    
    
    
    16,969643,209
    
    
    
    465,247
    
    
    
    23,532
    
    
    
    24,567212,688
    
    
    
    210,090
    
    
    
    8,952
    
    
    
    8,952193,633
    
    
    
    163,497
    
    
    
    26,521
    
    
    
    13,478$
    10,892,447
    
    
    $
    11,422,555
    
    
    $
    1,708,278
    
    
    $
    1,938,870$
    424,025
    
    
    $
    510,106
    
    
    $
    9,679
    
    
    $
    10,7271,678,933
    
    
    
    1,719,753
    
    
    
    85,449
    
    
    
    102,6763,849,354
    
    
    
    3,904,425
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,456,554
    
    
    
    1,663,040146,832
    
    
    
    176,002
    
    
    
    849
    
    
    
    935
    
    
    
    
    
    
    
    
    
    
    
    31,254
    
    
    
    31,041
    
    
    
    1
    
    
    
    166,777
    
    
    
    48,349
    
    
    
    275,467
    
    
    
    275,4674,909,794
    
    
    
    5,250,873
    
    
    
    (119,721
    )
    
    
    (113,976
    )(214,522
    )
    
    
    (217,994
    )
    
    
    
    
    
    
    4,793,303
    
    
    
    5,112,269
    
    
    
    155,747
    
    
    
    161,492$
    10,892,447
    
    
    $
    11,422,555
    
    
    $
    1,708,278
    
    
    $
    1,938,870
 *
    
    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.
 3




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##### Table of Contents



Centex Corporation and Subsidiaries
 
 Statements of Consolidated Cash Flows with Consolidating Details
   Centex Corporation and SubsidiariesFor the Three Months Ended June 30,2007
    
    
    2006Cash Flows  Operating ActivitiesNet Earnings (Loss)
    
    $
    (127,959
    )
    
    $
    160,257AdjustmentsDepreciation and Amortization
    
    
    14,846
    
    
    
    15,762Stock-based Compensation
    
    
    13,201
    
    
    
    19,940Provision for Losses on Mortgage Loans Held for Investment and Construction Loans
    
    
    717
    
    
    
    23,746Impairments and Write-off of Land-related Assets
    
    
    165,462
    
    
    
    36,302Deferred Income Tax (Benefit) Provision
    
    
    (67,696
    )
    
    
    26,778Loss (Earnings) of Joint Ventures and Unconsolidated Subsidiaries
    
    
    25,353
    
    
    
    (5,579
    )Distributions of Earnings of Joint Ventures and Unconsolidated Subsidiaries
    
    
    1,669
    
    
    
    5,233Minority Interest, net of Taxes
    
    
    (86
    )
    
    
    124Gain on Sale of Businesses
    
    
    (5,463
    )
    
    
    Changes in Assets and Liabilities, Excluding Effect of Acquisitions(Increase) Decrease in Restricted Cash
    
    
    (1,707
    )
    
    
    (780
    )Decrease (Increase) in Receivables
    
    
    47,042
    
    
    
    43,013Decrease in Mortgage Loans Held for Sale
    
    
    195,702
    
    
    
    401,952Decrease (Increase) in Receivables from Affiliates
    
    
    
    
    
    
    Increase in Housing Projects and Land Held for Development and Sale
    
    
    (236,003
    )
    
    
    (773,210
    )(Increase) Decrease in Other Inventories
    
    
    (1,043
    )
    
    
    166Decrease in Accounts Payable and Accrued Liabilities
    
    
    (392,005
    )
    
    
    (353,147
    )(Increase) Decrease in Other Assets, net
    
    
    (6,656
    )
    
    
    (17,216
    )Other
    
    
    (140
    )
    
    
    55(374,766
    )
    
    
    (416,604
    )Cash
Flows  Investing ActivitiesPayments received on Notes Receivable
    
    
    826
    
    
    
    1,528Increase in Mortgage Loans Held for Investment
    
    
    
    
    
    
    (286,691
    )Decrease (Increase) in Construction Loans
    
    
    17,641
    
    
    
    (45,342
    )Investment in and Advances to Joint Ventures
    
    
    (46,343
    )
    
    
    (54,203
    )Distributions of Capital from Joint Ventures
    
    
    27,154
    
    
    
    77,764Decrease (Increase) in Investments in and Advances to Unconsolidated Subsidiaries
    
    
    
    
    
    
    Purchases of Property and Equipment, net
    
    
    (2,498
    )
    
    
    (405
    )Other
    
    
    (19,500
    )
    
    
    (3,114
    )(22,720
    )
    
    
    (310,463
    )Cash Flows  Financing ActivitiesDecrease (Increase) in Restricted Cash
    
    
    1,219
    
    
    
    (87,098
    )(Decrease) Increase in Short-term Debt, net
    
    
    (206,793
    )
    
    
    443,658CentexIssuance of Long-term Debt
    
    
    53
    
    
    
    500,489Repayment of Long-term Debt
    
    
    (55,488
    )
    
    
    (103,601
    )Financial ServicesIssuance of Long-term Debt
    
    
    
    
    
    
    961,114Repayment of Long-term Debt
    
    
    
    
    
    
    (746,310
    )Proceeds from Stock Option Exercises
    
    
    14,062
    
    
    
    15,262Purchases of Common Stock, net
    
    
    (252
    )
    
    
    (187,799
    )Dividends Paid
    
    
    (4,825
    )
    
    
    (4,806
    )(252,024
    )
    
    
    790,909Net (Decrease) Increase in Cash and Cash Equivalents
    
    
    (649,510
    )
    
    
    63,842Cash and Cash Equivalents at Beginning of Period(1)
    
    
    882,754
    
    
    
    47,955Cash and Cash Equivalents at End of Period(2)
    
    $
    233,244
    
    
    $
    111,797
 See Notes to Consolidated Financial Statements.(1)
    
    Amount includes cash and cash equivalents of discontinued operations of $0 as of March 31,
2007 and $4,605 as of March 31, 2006.(2)
    
    Amount includes cash and cash equivalents of discontinued operations of $0 as of June 30,
2007 and $27,373 as of June 30, 2006.
 4




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##### Table of Contents



Centex Corporation and Subsidiaries
Statements of Consolidated Cash Flows with Consolidating Details
 
 Centex *
    
    
    Financial ServicesFor the Three Months Ended June 30,
    
    
    For the Three Months Ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006$
    (127,959
    )
    
    $
    160,257
    
    
    $
    9,255
    
    
    $
    (878
    )13,220
    
    
    
    12,103
    
    
    
    1,626
    
    
    
    3,65913,201
    
    
    
    19,940
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    717
    
    
    
    23,746165,462
    
    
    
    36,302
    
    
    
    
    
    
    
    (68,731
    )
    
    
    (11,636
    )
    
    
    1,035
    
    
    
    38,41416,098
    
    
    
    (4,701
    )
    
    
    
    
    
    
    16,669
    
    
    
    19,463
    
    
    
    
    
    
    
    
    
    
    
    29
    
    
    
    (86
    )
    
    
    95(5,463
    )
    
    
    
    
    
    
    
    
    
    
    (2,669
    )
    
    
    (525
    )
    
    
    962
    
    
    
    (255
    )50,150
    
    
    
    38,376
    
    
    
    (3,108
    )
    
    
    4,637
    
    
    
    
    
    
    
    195,702
    
    
    
    401,952
    
    
    
    
    
    
    
    21,728
    
    
    
    (30,293
    )(236,003
    )
    
    
    (773,210
    )
    
    
    
    
    
    
    115
    
    
    
    11
    
    
    
    (1,158
    )
    
    
    155(373,730
    )
    
    
    (324,174
    )
    
    
    (18,275
    )
    
    
    (20,726
    )6,387
    
    
    
    (22,428
    )
    
    
    (13,043
    )
    
    
    5,212(140
    )
    
    
    55
    
    
    
    
    
    
    
    (533,393
    )
    
    
    (850,138
    )
    
    
    195,355
    
    
    
    425,718826
    
    
    
    1,422
    
    
    
    
    
    
    
    106
    
    
    
    
    
    
    
    
    
    
    
    (286,691
    )
    
    
    
    
    
    
    
    17,641
    
    
    
    (45,342
    )(46,343
    )
    
    
    (54,203
    )
    
    
    
    
    
    
    27,154
    
    
    
    77,764
    
    
    
    
    
    
    
    (21,728
    )
    
    
    22,046
    
    
    
    
    
    
    
    (2,379
    )
    
    
    987
    
    
    
    (119
    )
    
    
    (1,392
    )(19,500
    )
    
    
    (3,114
    )
    
    
    
    
    
    
    (61,970
    )
    
    
    44,902
    
    
    
    17,522
    
    
    
    (333,319
    )
    
    
    
    
    
    
    
    1,219
    
    
    
    (87,098
    )(307
    )
    
    
    623,584
    
    
    
    (206,486
    )
    
    
    (179,926
    )53
    
    
    
    500,489
    
    
    
    
    
    
    
    (55,488
    )
    
    
    (103,601
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    961,114
    
    
    
    
    
    
    
    
    
    
    
    (746,310
    )14,062
    
    
    
    15,262
    
    
    
    
    
    
    
    (252
    )
    
    
    (187,799
    )
    
    
    
    
    
    
    (4,825
    )
    
    
    (4,806
    )
    
    
    (15,000
    )
    
    
    (14,230
    )(46,757
    )
    
    
    843,129
    
    
    
    (220,267
    )
    
    
    (66,450
    )(642,120
    )
    
    
    37,893
    
    
    
    (7,390
    )
    
    
    25,949870,688
    
    
    
    36,711
    
    
    
    12,066
    
    
    
    11,244$
    228,568
    
    
    $
    74,604
    
    
    $
    4,676
    
    
    $
    37,193
 *
    
    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.
 5




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##### Table of Contents



Centex Corporation and Subsidiaries
 
 Notes to Consolidated Financial Statements
 June 30, 2007
   (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.
   6




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##### Table of Contents



Interest Expense
  For the Three MonthsEnded June 30,2007
    
    
    2006Total Interest Incurred
    
    $
    82,351
    
    
    $
    185,480Less  Interest Capitalized
    
    
    (61,863
    )
    
    
    (72,594
    )Financial Services Interest Expense
    
    
    (20,488
    )
    
    
    (20,837
    )Discontinued Operations
    
    
    
    
    
    
    (92,049
    )Interest Expense, net
    
    $
    
    
    
    $
    Capitalized Interest Charged to Home
Buildings Costs and Expenses
    
    $
    43,066
    
    
    $
    37,050
 Income Taxes
       7




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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, 2007
    
    Stock Options
    
    
    1,420.3
    
    
    $
    28,603.0Stock Units
    
    
    366.2
    
    
    $
    19,955.4Restricted Stock
    
    
    121.2
    
    
    $
    6,379.9For the three months ended June 30, 2007
    
    Stock Options
    
    
    578.4
    
    
    $
    9,116.8Stock Units
    
    
    230.5
    
    
    $
    10,493.2Restricted Stock
    
    
    27.5
    
    
    $
    1,249.9
  Statements of Consolidated Cash Flows  Supplemental Disclosures
   For the Three MonthsEnded June 30,2007
    
    
    2006Cash Paid for Interest
    
    $
    78,869
    
    
    $
    168,783Net Cash Paid for Taxes
    
    $
    177,445
    
    
    $
    141,972
   8




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##### Table of Contents



Recent Accounting Pronouncements
   Reclassifications
  (B) STOCKHOLDERS EQUITY
  Capital in
    
    
    
    
    
    TreasuryCommon Stock
    
    
    Excess of
    
    
    Retained
    
    
    Stock,Shares
    
    
    Amount
    
    
    Par Value
    
    
    Earnings
    
    
    at Cost
    
    
    TotalBalance, March 31, 2007
    
    
    119,970
    
    
    $
    31,041
    
    
    $
    48,349
    
    
    $
    5,250,873
    
    
    $
    (217,994
    )
    
    $
    5,112,269Adoption of FIN 48
    
    
    
    
    
    
    
    
    
    
    (4,898
    )
    
    
    (208,295
    )
    
    
    
    
    
    
    (213,193
    )Issuance of Restricted Stock
and Stock Units
    
    
    93
    
    
    
    7
    
    
    
    (7,109
    )
    
    
    
    
    
    
    3,724
    
    
    
    (3,378
    )Stock Compensation
    
    
    
    
    
    
    
    
    
    
    13,201
    
    
    
    
    
    
    
    
    
    
    
    13,201Exercise of Stock Options
Including Tax Benefits
    
    
    825
    
    
    
    206
    
    
    
    17,192
    
    
    
    
    
    
    
    
    
    
    
    17,398Cash Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,825
    )
    
    
    
    
    
    
    (4,825
    )Purchase of Common
Stock for Treasury
    
    
    (6
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (252
    )
    
    
    (252
    )Other Stock Transactions
    
    
    1
    
    
    
    
    
    
    
    42
    
    
    
    
    
    
    
    
    
    
    
    42Net Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (127,959
    )
    
    
    
    
    
    
    (127,959
    )Balance, June 30, 2007
    
    
    120,883
    
    
    $
    31,254
    
    
    $
    66,777
    
    
    $
    4,909,794
    
    
    $
    (214,522
    )
    
    $
    4,793,303
 9




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##### Table of Contents



(C) MORTGAGE LOANS
  As ofJune 30, 2007
    
    
    March 31, 2007Mortgage Loans Held for Sale
    
    $
    1,118,517
    
    
    $
    1,314,219Construction Loans, net
    
    
    355,726
    
    
    
    374,084Mortgage Loans Receivable
    
    $
    1,474,243
    
    
    $
    1,688,303
  (D) INVENTORIES
 Housing Projects and Land Held for Development and Sale
  As ofJune 30, 2007
    
    
    March 31, 2007Direct Construction
    
    $
    3,200,774
    
    
    $
    3,062,389Land Under Development
    
    
    5,311,046
    
    
    
    5,433,593Housing Projects
    
    $
    8,511,820
    
    
    $
    8,495,982
  Land Held Under Option Agreements Not Owned and Other Land Deposits
    10




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##### Table of Contents



As ofJune 30, 2007
    
    
    March 31, 2007Cash Deposits included in:Land Held for Development and Sale
    
    $
    69,026
    
    
    $
    89,737Land Held Under Option Agreements Not Owned
    
    
    35,544
    
    
    
    38,642Total Cash Deposits in Inventory
    
    
    104,570
    
    
    
    128,379Letters of Credit
    
    
    4,653
    
    
    
    12,854Total Invested through Deposits or
Secured with Letters of Credit
    
    $
    109,223
    
    
    $
    141,233Total Purchase Price of Land Option Agreements
    
    $
    3,278,278
    
    
    $
    3,324,636
   (E) GOODWILL
  As of
    
    
    Goodwill
    
    
    As ofMarch 31, 2007
    
    
    Acquired
    
    
    June 30, 2007Home BuildingEast
    
    $
    27,945
    
    
    $
    
    
    
    $
    27,945Southeast
    
    
    29,160
    
    
    
    
    
    
    
    29,160Central
    
    
    8,505
    
    
    
    
    
    
    
    8,505Texas
    
    
    9,720
    
    
    
    
    
    
    
    9,720Northwest
    
    
    21,870
    
    
    
    
    
    
    
    21,870Southwest
    
    
    24,301
    
    
    
    
    
    
    
    24,301Other homebuilding
    
    
    
    
    
    
    
    
    
    
    Total Home Building
    
    
    121,501
    
    
    
    
    
    
    
    121,501Financial Services
    
    
    8,952
    
    
    
    
    
    
    
    8,952Other
    
    
    88,589
    
    
    
    2,598
    
    
    
    91,187Total
    
    $
    219,042
    
    
    $
    2,598
    
    
    $
    221,640
  11




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##### Table of Contents



(F) INDEBTEDNESS
  As ofJune 30, 2007
    
    
    March 31, 2007Weighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    AverageInterest
    
    
    
    
    
    
    InterestRate
    
    
    
    
    
    
    RateShort-term Debt:Centex
    
    $
    1,500
    
    
    
    
    
    
    $
    1,807
    
    
    
    Financial ServicesFinancial Institutions
    
    
    353,831
    
    
    
    6.25
    %
    
    
    428,144
    
    
    
    5.56
    %Harwood Street Funding I, LLC Secured
Liquidity Notes
    
    
    1,042,723
    
    
    
    5.40
    %
    
    
    1,174,896
    
    
    
    5.38
    %Consolidated Short-term Debt
    
    
    1,398,054
    
    
    
    
    
    
    
    1,604,847Long-term Debt:CentexMedium-term Note Programs, due through 2008
    
    
    170,000
    
    
    
    5.61
    %
    
    
    170,000
    
    
    
    5.61
    %Senior Notes, due through 2017
    
    
    3,654,029
    
    
    
    5.89
    %
    
    
    3,708,976
    
    
    
    5.89
    %Other Indebtedness, due through 2018
    
    
    23,825
    
    
    
    6.54
    %
    
    
    23,642
    
    
    
    6.57
    %3,847,854
    
    
    
    
    
    
    
    3,902,618Financial ServicesHarwood Street Funding I, LLC Variable-Rate
Subordinated Extendable Certificates,
due through 2010
    
    
    60,000
    
    
    
    7.32
    %
    
    
    60,000
    
    
    
    7.32
    %Consolidated Long-term Debt
    
    
    3,907,854
    
    
    
    
    
    
    
    3,962,618Total Debt
    
    $
    5,305,908
    
    
    
    
    
    
    $
    5,567,465
  12




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##### Table of Contents



For the Three Months Ended June 30,2007
    
    2006Short-term Debt:Centex
    
    
    
    
    
    
    5.16
    %Financial Services
    
    
    5.86
    %
    
    
    5.30
    %Long-term Debt:CentexMedium-term Note Programs
    
    
    5.68
    %
    
    
    5.88
    % (1)Senior Notes
    
    
    5.91
    %
    
    
    5.87
    %Other Indebtedness
    
    
    6.53
    %
    
    
    5.84
    %Subordinated Debentures
    
    
    
    
    
    
    8.75
    %Financial ServicesHarwood Street Funding I, LLC
Variable-Rate
Subordinated Extendable Certificates
    
    
    7.42
    %
    
    
    7.08
    %
 (1)
    
    Interest rate includes the effect of an interest rate swap
agreement.
  FinancialCentex
    
    
    Services
    
    
    Total2008
    
    $
    526,292
    
    
    $
    
    
    
    $
    526,2922009
    
    
    150,854
    
    
    
    
    
    
    
    150,8542010
    
    
    225,408
    
    
    
    60,000
    
    
    
    285,4082011
    
    
    700,250
    
    
    
    
    
    
    
    700,2502012
    
    
    349,312
    
    
    
    
    
    
    
    349,312Thereafter
    
    
    1,895,738
    
    
    
    
    
    
    
    1,895,738$
    3,847,854
    
    
    $
    60,000
    
    
    $
    3,907,854
  13




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##### Table of Contents



Credit Facilities
  Existing Credit
    
    
    AvailableFacilities
    
    
    CapacityCentexMulti-Bank Revolving Credit FacilityRevolving Credit
    
    $
    1,250,000
    
    
    $
    1,250,000Letters of Credit
    
    
    835,000
    
    
    
    538,9482,085,000
    
    
    
    1,788,948
    (1) (2)Financial ServicesSecured Credit Facilities
    
    
    440,000
    
    
    
    351,170
    (3)Mortgage Conduit Facilities
    
    
    450,000
    
    
    
    185,000
    (4)Harwood Street Funding I, LLC Facility
    
    
    3,000,000
    
    
    
    1,895,6003,890,000
    
    
    
    2,431,770$
    5,975,000
    
    
    $
    4,220,718
 (1)
    
    This is an unsecured, committed, multi-bank revolving credit facility, maturing in July
2010, which serves as backup for Centex Corporations $1.25 billion commercial paper program
and provides $835 million of letter of credit capacity. As of June 30, 2007, the $1.25
billion commercial paper program had no amounts outstanding. There have been no direct
borrowings under this revolving credit facility since its inception.(2)
    
    Centex maintains a minimum of $100 million in unused committed credit at all times in
conjunction with certain remaining surety bond obligations relating to Construction Services
projects commenced prior to the sale of Construction Services on March 30, 2007. Following
the sale of Construction Services, the purchaser has indemnified Centex for losses and Centex
has obtained a back-up indemnity from an AA- (S&P), Aa3 (Moodys) rated financial institution, which
indemnifies Centex against certain losses under any such letter of credit.(3)
    
    CTX Mortgage Company, LLC maintains $440 million of secured, committed mortgage warehouse
facilities.(4)
    
    A wholly-owned limited purpose subsidiary of CTX Mortgage Company, LLC maintains secured,
committed facilities funded through commercial paper conduits to finance the purchase of
certain mortgage loans from CTX Mortgage Company, LLC.
 CTX Mortgage Company, LLC and Harwood Street Funding I, LLC
   14




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##### Table of Contents



15




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##### Table of Contents



(G) COMMITMENTS AND CONTINGENCIES
 Joint Ventures
   As ofJune 30, 2007
    
    
    March 31, 2007Number of Active Joint Ventures (1)
    
    
    43
    
    
    
    49Investment in Joint Ventures
    
    $
    273,872
    
    
    $
    281,644Total Joint Venture Debt (2)
    
    $
    897,370
    
    
    $
    1,000,599Centexs Share of Joint Venture Debt:Based on Centexs Ownership Percentage
    
    $
    365,494
    
    
    $
    412,397Based on Limited Recourse Provisions:Limited Maintenance Guarantee (3) (5)
    
    $
    133,441
    
    
    $
    162,425Repayment Guarantee (4) (5)
    
    
    12,137
    
    
    
    12,055Total Limited Recourse Debt
    
    $
    145,578
    
    
    $
    174,480
 (1)
    
    The number of active 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 is the managing member of 23 and 28 of
the active joint ventures as of June 30, 2007 and March 31, 2007, respectively.(2)
    
    As of June 30, 2007 and March 31, 2007, 21 of the active joint ventures have
outstanding debt.(3)
    
    The Company has guaranteed that certain of the joint ventures will maintain a
specified loan to value ratio. For certain joint ventures, the Company has contributed
additional capital in order to maintain loan to value requirements.(4)
    
    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.(5)
    
    These amounts represent the Companys maximum exposure related to the joint
ventures debt at each respective date.
  Letters of Credit and Surety Bonds
  16




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##### Table of Contents



As of June 30, 2007
    
    
    As of March 31, 2007Letters of Credit
    
    
    Surety Bonds
    
    
    Letters of Credit
    
    
    Surety BondsHome Building
    
    $
    189.8
    
    
    $
    1,672.9
    (1)
    
    $
    209.1
    
    
    $
    1,542.3Financial Services
    
    
    0.7
    
    
    
    14.8
    
    
    
    0.7
    
    
    
    10.7Other
    
    
    81.0
    
    
    
    1.7
    
    
    
    94.4
    
    
    
    1.7Discontinued
Operations
(2)
    
    
    25.0
    
    
    
    3,770.0
    
    
    
    38.1
    
    
    
    4,161.8$
    296.5
    
    
    $
    5,459.4
    
    
    $
    342.3
    
    
    $
    5,716.5
 (1)
    
    The Company estimates that $700.9 million of work remains to be performed on these
projects.(2)
    
    After the sale of Construction Services, the Company remains responsible 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 $3.77 billion, although the risk of
liability with respect to these surety bonds declines as the relevant construction projects
are performed. At June 30, 2007, the Company estimates that $1.53 billion of work remains to
be performed on these projects. In connection with certain of these surety bond obligations,
the Company has agreed to provide certain sureties with letters of credit of up to $100
million if its public debt ratings fall below investment grade. The purchaser of Construction
Services has agreed to indemnify Centex against losses relating to such surety bond
obligations, including amounts drawn under any such letters of credit. The Company has
purchased for its benefit an additional back-up indemnity provided by a financial institution
with an AA- (S&P), Aa3 (Moodys) credit rating. The obligation of such financial institution
under the back-up indemnity is initially subject to a limit of $2 billion, which declines to
$400 million over time and terminates in 2016.
 Community Development and Other Special District Obligations
  Warranties and Guarantees
   17




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##### Table of Contents



June 30, 2007
    
    
    March 31, 2007
    (1)Balance at Beginning of Period
    
    $
    44,293
    
    
    $
    47,199Warranties Issued
    
    
    9,032
    
    
    
    42,422Settlements Made
    
    
    (11,449
    )
    
    
    (45,228
    )Changes in Liability of Pre-Existing
Warranties, Including Expirations
    
    
    (608
    )
    
    
    (100
    )Balance at End of Period
    
    $
    41,268
    
    
    $
    44,293
 (1)
    
    For the three months ended June 30, 2006, warranties issued, settlements made and
changes in liability of pre-existing warranties were $15,891, ($14,954) and $0,
respectively.
  June 30, 2007
    
    
    March 31, 2007
    (1)Balance at Beginning of Period
    
    $
    16,863
    
    
    $
    18,500Provision for Losses
    
    
    448
    
    
    
    2,160Settlements
    
    
    (935
    )
    
    
    (1,178
    )Changes in Pre-Existing Reserves
    
    
    135
    
    
    
    (2,619
    )Balance at End of Period
    
    $
    16,511
    
    
    $
    16,863
 (1)
    
    For the three months ended June 30, 2006, provisions for losses, settlements and
changes in pre-existing reserves were $524, ($274) and ($45), respectively.
 Forward Trade and Interest Rate Lock Commitments
    Litigation and Related Matters
   18




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##### Table of Contents



(H) COMPREHENSIVE INCOME
  For the Three Months Ended June 30,2007
    
    
    2006Net Earnings (Loss)
    
    $
    (127,959
    )
    
    $
    160,257Other Comprehensive Income, net of Tax:Unrealized Gain on Hedging Instruments
    
    
    
    
    
    
    8,247Foreign Currency Translation Adjustments
    
    
    
    
    
    
    25Comprehensive Income (Loss)
    
    $
    (127,959
    )
    
    $
    168,529
  (I) BUSINESS SEGMENTS
   East:
 Southeast:
 Central:
 Texas:
 Northwest:
 Southwest:
 Other homebuilding (1)
 (1)
    
    Other homebuilding includes projects that the Company plans to build-out and
liquidate, and ancillary businesses (including framing, carpet and holding companies)
conducting business in the following states: Florida, North Carolina, New Hampshire
and Texas. In addition, Other homebuilding includes amounts consolidated under the
caption land held under option agreements not owned and capitalized interest for all
regions.
   19




---



##### Table of Contents



Home Building
  Financial Services
  Other
   For the Three Months Ended June 30,2007
    
    
    2006Operating Earnings (Loss) from Home Services Operations
    
    $
    1,208
    
    
    $
    (1,728
    )Operating Earnings (Loss)from Investment Real Estate Operations
    
    
    
    
    
    
    (39
    )Interest Income and Other Revenue
    
    
    4,926
    
    
    
    Corporate General and Administrative Expense
    
    
    (44,981
    )
    
    
    (54,770
    )$
    (38,847
    )
    
    $
    (56,537
    )
  For the Three Months Ended June 30,2007
    
    
    2006Earnings
    
    
    Earnings
    
    
    
    
    
    
    
    
    
    
    Earnings(Loss)
    
    
    (Loss) from
    
    
    
    
    
    
    Earnings
    
    
    (Loss) fromfrom
    
    
    Continuing
    
    
    
    
    
    
    from
    
    
    ContinuingUnconsolidated
    
    
    Operations
    
    
    
    
    
    
    Unconsolidated
    
    
    OperationsEntities and
    
    
    Before
    
    
    
    
    
    
    Entities and
    
    
    BeforeRevenues
    
    
    Other
    
    
    Income Tax
    
    
    Revenues
    
    
    Other
    
    
    Income TaxHome BuildingEast
    
    $
    360,776
    
    
    $
    65
    
    
    $
    18,052
    
    
    $
    544,423
    
    
    $
    639
    
    
    $
    82,979Southeast
    
    
    213,857
    
    
    
    1,934
    
    
    
    (13,017
    )
    
    
    397,782
    
    
    
    1,220
    
    
    
    60,602Central
    
    
    185,069
    
    
    
    1,415
    
    
    
    (6,367
    )
    
    
    289,914
    
    
    
    324
    
    
    
    9,633Texas
    
    
    234,733
    
    
    
    114
    
    
    
    14,136
    
    
    
    244,356
    
    
    
    101
    
    
    
    20,347Northwest
    
    
    395,525
    
    
    
    (24,288
    )
    
    
    (32,081
    )
    
    
    504,879
    
    
    
    4,380
    
    
    
    73,290Southwest
    
    
    371,204
    
    
    
    713
    
    
    
    (115,600
    )
    
    
    592,033
    
    
    
    1,951
    
    
    
    48,170Other homebuilding
    
    
    42,656
    
    
    
    (6
    )
    
    
    (36,902
    )
    
    
    76,450
    
    
    
    2,053
    
    
    
    16,892Total Home Building
    
    
    1,803,820
    
    
    
    (20,053
    )
    
    
    (171,779
    )
    
    
    2,649,837
    
    
    
    10,668
    
    
    
    311,913Financial Services
    
    
    97,966
    
    
    
    
    
    
    
    14,969
    
    
    
    122,741
    
    
    
    
    
    
    
    23,087Other
    
    
    39,629
    
    
    
    
    
    
    
    (38,847
    )
    
    
    31,322
    
    
    
    
    
    
    
    (56,537
    )Total
    
    $
    1,941,415
    
    
    $
    (20,053
    )
    
    $
    (195,657
    )
    
    $
    2,803,900
    
    
    $
    10,668
    
    
    $
    278,463
 20




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##### Table of Contents



For the Three Months Ended June 30,2007
    
    
    2006Impairments
    
    
    Write-offs
    
    
    Impairments
    
    
    Write-offsHome BuildingEast
    
    $
    
    
    
    $
    7,372
    
    
    $
    
    
    
    $
    1,918Southeast
    
    
    7,415
    
    
    
    3,044
    
    
    
    
    
    
    
    822Central
    
    
    4,283
    
    
    
    460
    
    
    
    
    
    
    
    1,592Texas
    
    
    
    
    
    
    57
    
    
    
    
    
    
    
    19Northwest
    
    
    18,296
    
    
    
    4,549
    
    
    
    
    
    
    
    9,254Southwest
    
    
    81,403
    
    
    
    7,212
    
    
    
    
    
    
    
    22,697Other homebuilding
    
    
    31,195
    
    
    
    176
    
    
    
    
    
    
    
    Total Home Building
    
    
    142,592
    
    
    
    22,870
    
    
    
    
    
    
    
    36,302Financial Services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    142,592
    
    
    $
    22,870
    
    
    $
    
    
    
    $
    36,302
 As ofJune 30, 2007
    
    
    March 31, 2007Inventory
    
    
    Total Assets
    
    
    Inventory
    
    
    Total AssetsHome BuildingEast
    
    $
    1,526,490
    
    
    $
    1,698,751
    
    
    $
    1,477,904
    
    
    $
    1,663,815Southeast
    
    
    1,664,301
    
    
    
    1,789,998
    
    
    
    1,703,614
    
    
    
    1,821,660Central
    
    
    569,924
    
    
    
    616,984
    
    
    
    606,508
    
    
    
    652,799Texas
    
    
    628,993
    
    
    
    643,480
    
    
    
    605,200
    
    
    
    630,396Northwest
    
    
    1,707,088
    
    
    
    1,755,948
    
    
    
    1,725,847
    
    
    
    1,829,961Southwest
    
    
    2,070,993
    
    
    
    2,217,885
    
    
    
    2,112,369
    
    
    
    2,304,415Other homebuilding
    
    
    714,454
    
    
    
    1,392,792
    
    
    
    704,868
    
    
    
    1,212,444Total Home Building
    
    
    8,882,243
    
    
    
    10,115,838
    
    
    
    8,936,310
    
    
    
    10,115,490Financial Services
    
    
    9,905
    
    
    
    1,706,218
    
    
    
    8,747
    
    
    
    1,915,082Other
    
    
    2,554
    
    
    
    622,922
    
    
    
    6,022
    
    
    
    1,169,361Total
    
    $
    8,894,702
    
    
    $
    12,444,978
    
    
    $
    8,951,079
    
    
    $
    13,199,933
 (J) INCOME TAXES
     21




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##### Table of Contents



(K) DERIVATIVES AND HEDGING
  Fair Value Hedges
  Other Derivatives
    (L) DISCONTINUED OPERATIONS
 Condensed Financial Information
  22




---



##### Table of Contents



Home Equity
    Sales and Related Proceeds, net of Related Expenses
    
    $
    518,500Assets Sold
    
    
    (400,706
    )Intercompany Liability Paid by Buyer
    
    
    (11,795
    )Deferred Income
    
    
    (6,100
    )Hedging Gain
    
    
    25,466Pre-tax Gain on Sale
    
    
    125,365Income Tax Expense
    
    
    (50,390
    )Net Gain on Sale
    
    $
    74,975
 Construction Services
   23




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##### Table of Contents



For the Three Months Ended
    
    
    For the Year EndedJune 30, 2007
    
    
    March 31, 2007Sales and Related Proceeds, net of
Related Expenses
    
    $
    5,463
    
    
    $
    344,752Assets Sold
    
    
    
    
    
    
    Pre-tax Gain on Sale
    
    
    5,463
    
    
    
    344,752Income Tax Expense
    
    
    (2,087
    )
    
    
    (131,695
    )Net Gain on Sale
    
    $
    3,376
    
    
    $
    213,057
 Summarized Financial Information
  For the Three Months Ended June 30,2007(1)
    
    
    2006 (2)Revenues
    
    $
    
    
    
    $
    622,466Costs and Expenses
    
    
    
    
    
    
    (642,124
    )Earnings from Unconsolidated Entities and Other
    
    
    
    
    
    
    74Loss Before Income Taxes
    
    
    
    
    
    
    (19,584
    )Benefit for Income Taxes
    
    
    
    
    
    
    7,413Gain on Sale, net of Tax
    
    
    3,376
    
    
    
    $
    3,376
    
    
    $
    (12,171
    )
 (1)
    
    Includes Construction Services only.(2)
    
    Includes Construction Services and Home Equity.
 (M) SUBSEQUENT EVENTS
    24




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
  Executive Summary
  For the Three Months Ended June 30,2007
    
    
    2006
    
    
    ChangeRevenuesHome Building
    
    $
    1,803,820
    
    
    $
    2,649,837
    
    
    
    (31.9
    %)Financial Services
    
    
    97,966
    
    
    
    122,741
    
    
    
    (20.2
    %)Other
    
    
    39,629
    
    
    
    31,322
    
    
    
    26.5
    %Total
    
    $
    1,941,415
    
    
    $
    2,803,900
    
    
    
    (30.8
    %)Earnings (Loss) from Continuing Operations
Before Income TaxesHome Building
    
    $
    (171,779
    )
    
    $
    311,913
    
    
    
    (155.1
    %)Financial Services
    
    
    14,969
    
    
    
    23,087
    
    
    
    (35.2
    %)Other
    
    
    (38,847
    )
    
    
    (56,537
    )
    
    
    (31.3
    %)Total
    
    $
    (195,657
    )
    
    $
    278,463
    
    
    
    (170.3
    %)
   
    
a decline in homebuyer demand due to lower consumer confidence in the
consumer real estate market and a decrease in the affordability of housing in selected
markets,
    
increased inventory of new and existing homes for sale, and
    
pricing pressures resulting from the imbalance between supply and demand.
   25




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##### Table of Contents




    
an $846.0 million decrease in homebuilding revenues, net of discounts,
    
$142.6 million in impairments,
    
$27.1 million in our share of joint ventures impairments, and
    
$22.9 million in write-offs of land deposits and pre-acquisition costs.
     26




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##### Table of Contents



HOME BUILDING
  For the Three Months Ended June 30,2007
    
    
    2006Change
    
    
    
    
    
    
    ChangeRevenues  Housing
    
    $
    1,774,738
    
    
    
    (30.7
    %)
    
    $
    2,562,058
    
    
    
    8.6
    %Revenues  Land Sales and Other
    
    
    29,082
    
    
    
    (66.9
    %)
    
    
    87,779
    
    
    
    113.8
    %Cost of Sales  Housing
    
    
    (1,481,351
    )
    
    
    (20.6
    %)
    
    
    (1,866,511
    )
    
    
    11.5
    %Cost of Sales  Land Sales and Other
    
    
    (175,567
    )
    
    
    67.6
    %
    
    
    (104,777
    )
    
    
    182.3
    %Selling, General and Administrative Expenses
    
    
    (298,628
    )
    
    
    (20.9
    %)
    
    
    (377,304
    )
    
    
    16.7
    %Earnings (Loss) from Unconsolidated Entities
and Other (1)
    
    
    (20,053
    )
    
    
    (288.0
    %)
    
    
    10,668
    
    
    
    (14.1
    %)Operating Earnings (Loss)(2)
    
    $
    (171,779
    )
    
    
    (155.1
    %)
    
    $
    311,913
    
    
    
    (17.4
    %)Operating
Earnings (Loss) as a Percentage of Revenues:Housing Operations (3)
    
    
    (0.3%
    )
    
    
    (12.7)

    
    
    12.4
    %
    
    
    (2.9)Total Homebuilding Operations
    
    
    (9.5%
    )
    
    
    (21.3)

    
    
    11.8
    %
    
    
    (3.9)
 (1)
    
    Earnings (Loss) from Unconsolidated Entities and Other include our share of joint
ventures impairments.(2)
    
    Operating earnings (loss) represent Home Buildings earnings exclusive of certain homebuilding
corporate general and administrative expenses.(3)
    
    Operating earnings (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:  Southeast:  Central:  Texas:  Northwest:  Southwest:  Other homebuilding (1)
 (1)
    
    Other homebuilding includes projects that we plan to build-out and liquidate,
and ancillary businesses (including framing, carpet and holding companies) conducting
business in the following states: Florida, North Carolina, New Hampshire and Texas.
In addition, Other homebuilding includes amounts consolidated under the caption land
held under option agreements not owned and capitalized interest for all regions.
 27




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##### Table of Contents



For the Three Months Ended June 30,2007

    
    2006Change
    
    
    
    
    
    
    ChangeUnits ClosedEast
    
    
    1,119
    
    
    
    (32.3
    %)
    
    
    1,653
    
    
    
    9.2
    %Southeast
    
    
    716
    
    
    
    (40.0
    %)
    
    
    1,193
    
    
    
    (5.2
    %)Central
    
    
    868
    
    
    
    (34.2
    %)
    
    
    1,320
    
    
    
    2.4
    %Texas
    
    
    1,400
    
    
    
    (7.0
    %)
    
    
    1,506
    
    
    
    (1.7
    %)Northwest
    
    
    987
    
    
    
    (9.4
    %)
    
    
    1,090
    
    
    
    4.5
    %Southwest
    
    
    895
    
    
    
    (34.4
    %)
    
    
    1,364
    
    
    
    10.3
    %Other homebuilding
    
    
    110
    
    
    
    (42.7
    %)
    
    
    192
    
    
    
    (47.0
    %)6,095
    
    
    
    (26.7
    %)
    
    
    8,318
    
    
    
    1.0
    %Average Revenue Per UnitEast
    
    $
    317,134
    
    
    
    (3.6
    %)
    
    $
    329,082
    
    
    
    1.5
    %Southeast
    
    $
    290,675
    
    
    
    (6.5
    %)
    
    $
    310,987
    
    
    
    12.6
    %Central
    
    $
    210,853
    
    
    
    (3.4
    %)
    
    $
    218,383
    
    
    
    0.5
    %Texas
    
    $
    165,994
    
    
    
    7.2
    %
    
    $
    154,833
    
    
    
    5.4
    %Northwest
    
    $
    397,728
    
    
    
    (12.1
    %)
    
    $
    452,626
    
    
    
    1.5
    %Southwest
    
    $
    411,096
    
    
    
    (2.4
    %)
    
    $
    421,361
    
    
    
    9.7
    %Other homebuilding
    
    $
    325,836
    
    
    
    8.7
    %
    
    $
    299,667
    
    
    
    45.8
    %Total Home Building
    
    $
    291,179
    
    
    
    (5.5
    %)
    
    $
    308,014
    
    
    
    7.6
    %
 Revenues
    For the Three Months Ended June 30,2007

    
    2006Change
    
    
    
    
    
    
    ChangeAverage Operating Neighborhoods (1)
    
    
    676
    
    
    
    1.0
    %
    
    
    669
    
    
    
    10.6
    %Closings Per Average Neighborhood
    
    
    9.0
    
    
    
    (27.4
    %)
    
    
    12.4
    
    
    
    (8.8
    %)
 (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.
  28




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##### Table of Contents



Operating Margins
     For the Three Months Ended June 30,2007

    
    2006Impairments

    
    Write-offs

    
    Impairments

    
    Write-offsEast
    
    $
    
    
    
    $
    7,372
    
    
    $
    
    
    
    $
    1,918Southeast
    
    
    7,415
    
    
    
    3,044
    
    
    
    
    
    
    
    822Central
    
    
    4,283
    
    
    
    460
    
    
    
    
    
    
    
    1,592Texas
    
    
    
    
    
    
    57
    
    
    
    
    
    
    
    19Northwest
    
    
    18,296
    
    
    
    4,549
    
    
    
    
    
    
    
    9,254Southwest
    
    
    81,403
    
    
    
    7,212
    
    
    
    
    
    
    
    22,697Other homebuilding
    
    
    31,195
    
    
    
    176
    
    
    
    
    
    
    
    $
    142,592
    
    
    $
    22,870
    
    
    $
    
    
    
    $
    36,302
  29




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##### Table of Contents



For the Three Months Ended June 30,2007

    
    2006Change
    
    
    
    
    
    
    ChangeCompensation and Benefits
    
    $
    117,473
    
    
    
    (34.2
    %)
    
    $
    178,477
    
    
    
    12.3
    %Sales Commissions
    
    
    86,056
    
    
    
    (15.0
    %)
    
    
    101,261
    
    
    
    15.0
    %Advertising and Marketing
    
    
    41,939
    
    
    
    (11.8
    %)
    
    
    47,557
    
    
    
    35.1
    %Other
    
    
    53,160
    
    
    
    6.3
    %
    
    
    50,009
    
    
    
    21.6
    %Selling, General and Administrative Expenses
    
    $
    298,628
    
    
    
    (20.9
    %)
    
    $
    377,304
    
    
    
    16.7
    %SG&A as a Percentage of Revenues
    
    
    16.6
    %
    
    
    2.4
    
    
    
    14.2
    %
    
    
    0.7
 Sales Orders, Backlog Units and Land Holdings
  For the Three Months Ended June 30,2007

    
    2006Change
    
    
    
    
    
    
    ChangeSales Orders (in Units)East
    
    
    1,282
    
    
    
    (17.2
    %)
    
    
    1,549
    
    
    
    (23.1
    %)Southeast
    
    
    743
    
    
    
    (26.9
    %)
    
    
    1,017
    
    
    
    (34.6
    %)Central
    
    
    973
    
    
    
    (25.6
    %)
    
    
    1,308
    
    
    
    (7.2
    %)Texas
    
    
    1,435
    
    
    
    (21.8
    %)
    
    
    1,834
    
    
    
    9.5
    %Northwest
    
    
    914
    
    
    
    (20.2
    %)
    
    
    1,146
    
    
    
    (6.0
    %)Southwest
    
    
    1,097
    
    
    
    (17.5
    %)
    
    
    1,329
    
    
    
    (38.0
    %)Other homebuilding
    
    
    30
    
    
    
    (55.2
    %)
    
    
    67
    
    
    
    (83.3
    %)6,474
    
    
    
    (21.5
    %)
    
    
    8,250
    
    
    
    (20.8
    %)Sales Per Average Neighborhood
    
    
    9.6
    
    
    
    (22.0
    %)
    
    
    12.3
    
    
    
    (28.5
    %)
 As ofJune 30, 2007

    
    March 31, 2007Change
    
    
    
    
    
    
    ChangeBacklog UnitsEast
    
    
    2,011
    
    
    
    8.8
    %
    
    
    1,848
    
    
    
    (39.9
    %)Southeast
    
    
    1,546
    
    
    
    1.8
    %
    
    
    1,519
    
    
    
    (56.2
    %)Central
    
    
    1,849
    
    
    
    6.0
    %
    
    
    1,744
    
    
    
    (22.9
    %)Texas
    
    
    2,055
    
    
    
    1.7
    %
    
    
    2,020
    
    
    
    (7.7
    %)Northwest
    
    
    1,732
    
    
    
    (4.0
    %)
    
    
    1,805
    
    
    
    (18.5
    %)Southwest
    
    
    1,705
    
    
    
    13.4
    %
    
    
    1,503
    
    
    
    (52.6
    %)Other homebuilding
    
    
    132
    
    
    
    (37.7
    %)
    
    
    212
    
    
    
    (79.0
    %)11,030
    
    
    
    3.6
    %
    
    
    10,651
    
    
    
    (38.7
    %)
   30




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##### Table of Contents



As ofJune 30, 2007

    
    March 31, 2007Lots

    
    Lots

    
    
    
    
    
    Lots

    
    LotsOwned

    
    Controlled

    
    Total Lots

    
    Owned

    
    Controlled

    
    Total LotsEast
    
    
    18,170
    
    
    
    23,201
    
    
    
    41,371
    
    
    
    18,604
    
    
    
    25,829
    
    
    
    44,433Southeast
    
    
    25,027
    
    
    
    6,537
    
    
    
    31,564
    
    
    
    25,485
    
    
    
    7,113
    
    
    
    32,598Central
    
    
    7,837
    
    
    
    5,561
    
    
    
    13,398
    
    
    
    8,851
    
    
    
    5,303
    
    
    
    14,154Texas
    
    
    16,824
    
    
    
    8,419
    
    
    
    25,243
    
    
    
    16,113
    
    
    
    10,405
    
    
    
    26,518Northwest
    
    
    9,467
    
    
    
    5,824
    
    
    
    15,291
    
    
    
    10,388
    
    
    
    6,224
    
    
    
    16,612Southwest
    
    
    15,170
    
    
    
    4,806
    
    
    
    19,976
    
    
    
    14,694
    
    
    
    6,755
    
    
    
    21,449Other homebuilding
    
    
    3,870
    
    
    
    
    
    
    
    3,870
    
    
    
    4,176
    
    
    
    80
    
    
    
    4,25696,365
    
    
    
    54,348
    
    
    
    150,713
    
    
    
    98,311
    
    
    
    61,709
    
    
    
    160,020Change
    
    
    (2.0
    %)
    
    
    (11.9
    %)
    
    
    (5.8
    %)
    
    
    (9.7
    %)
    
    
    (67.0
    %)
    
    
    (45.9
    %)
   31




---



##### Table of Contents



Regional Discussion
  For the Three Months Ended June 30,2007

    
    2006Change
    
    
    
    
    
    
    ChangeRevenuesEast
    
    $
    360,776
    
    
    
    (33.7
    %)
    
    $
    544,423
    
    
    
    9.8
    %Southeast
    
    
    213,857
    
    
    
    (46.2
    %)
    
    
    397,782
    
    
    
    11.1
    %Central
    
    
    185,069
    
    
    
    (36.2
    %)
    
    
    289,914
    
    
    
    2.6
    %Texas
    
    
    234,733
    
    
    
    (3.9
    %)
    
    
    244,356
    
    
    
    8.2
    %Northwest
    
    
    395,525
    
    
    
    (21.7
    %)
    
    
    504,879
    
    
    
    8.2
    %Southwest
    
    
    371,204
    
    
    
    (37.3
    %)
    
    
    592,033
    
    
    
    24.0
    %Other homebuilding
    
    
    42,656
    
    
    
    (44.2
    %)
    
    
    76,450
    
    
    
    (17.5
    %)$
    1,803,820
    
    
    
    (31.9
    %)
    
    $
    2,649,837
    
    
    
    10.4
    %Operating Earnings (Loss)East
    
    $
    18,052
    
    
    
    (78.2
    %)
    
    $
    82,979
    
    
    
    (2.3
    %)Southeast
    
    
    (13,017
    )
    
    
    (121.5
    %)
    
    
    60,602
    
    
    
    20.9
    %Central
    
    
    (6,367
    )
    
    
    (166.1
    %)
    
    
    9,633
    
    
    
    (54.8
    %)Texas
    
    
    14,136
    
    
    
    (30.5
    %)
    
    
    20,347
    
    
    
    35.5
    %Northwest
    
    
    (32,081
    )
    
    
    (143.8
    %)
    
    
    73,290
    
    
    
    (35.2
    %)Southwest
    
    
    (115,600
    )
    
    
    (340.0
    %)
    
    
    48,170
    
    
    
    (43.7
    %)Other homebuilding
    
    
    (36,902
    )
    
    
    (318.5
    %)
    
    
    16,892
    
    
    
    122.3
    %$
    (171,779
    )
    
    
    (155.1
    %)
    
    $
    311,913
    
    
    
    (17.4
    %)
 East
   Southeast
   32




---



##### Table of Contents



Central
   Texas
   Northwest
   Southwest
   33




---



##### Table of Contents



Other homebuilding
   FINANCIAL SERVICES
     34




---



##### Table of Contents



For the Three Months Ended June 30,2007

    
    2006Change
    
    
    
    
    
    
    ChangeRevenues
    
    $
    97,966
    
    
    
    (20.2
    %)
    
    $
    122,741
    
    
    
    11.6
    %Cost of Sales
    
    
    (20,488
    )
    
    
    (1.7
    %)
    
    
    (20,837
    )
    
    
    63.1
    %Selling, General and Administrative Expenses
    
    
    (62,509
    )
    
    
    (20.7
    %)
    
    
    (78,817
    )
    
    
    3.8
    %Operating Earnings
    
    $
    14,969
    
    
    
    (35.2
    %)
    
    $
    23,087
    
    
    
    8.5
    %Operating Margin
    
    
    15.3
    %
    
    
    (3.5
    )
    
    
    18.8
    %
    
    
    (0.5
    )Financial Services Margin (1)
    
    
    19.3
    %
    
    
    (3.4
    )
    
    
    22.7
    %
    
    
    0.8Net Interest Income
    
    $
    5,552
    
    
    
    (35.0
    %)
    
    $
    8,539
    
    
    
    (19.6
    %)Average Interest Earning Assets
    
    $
    1,445,433
    
    
    
    (8.2
    %)
    
    $
    1,574,341
    
    
    
    5.7
    %Average Yield
    
    
    7.21
    %
    
    
    (0.25
    )
    
    
    7.46
    %
    
    
    1.1
    7Average Interest Bearing Liabilities
    
    $
    1,389,545
    
    
    
    (9.8
    %)
    
    $
    1,541,255
    
    
    
    3.6
    %Average Rate Paid
    
    
    5.98
    %
    
    

    0.55
    
    
    
    5.43
    %
    
    
    1.9
    7
 (1)
    
    Financial Services margin is a non-GAAP financial measure, which we believe is useful as it
allows investors to assess the operating performance of our Financial Services operations by
netting the cost of funding mortgage originations (interest expense) against the related
interest income. Financial Services margin is equal to Operating Earnings as a percentage of
Financial Services Revenues less interest expense, all of which are set forth in the table above.
   For the Three Months Ended June 30,2007

    
    2006Change
    
    
    
    
    
    
    ChangeLoan Sales to InvestorsVolume (in millions)
    
    $
    2,353.3
    
    
    
    (17.6
    %)
    
    $
    2,857.2
    
    
    
    11.9
    %Number of Loans Sold
    
    
    10,848
    
    
    
    (24.2
    %)
    
    
    14,312
    
    
    
    8.4
    %Gain on Sale of Mortgage Loans
    
    $
    38,634
    
    
    
    (17.1
    %)
    
    $
    46,597
    
    
    
    18.4
    %Loans Brokered to Third Party LendersVolume (in millions)
    
    $
    597.8
    
    
    
    (37.5
    %)
    
    $
    957.1
    
    
    
    9.4
    %Number of Brokered Loans
    
    
    1,719
    
    
    
    (46.9
    %)
    
    
    3,237
    
    
    
    (5.1
    %)Broker Fees
    
    $
    10,657
    
    
    
    (42.7
    %)
    
    $
    18,603
    
    
    
    3.2
    %Average Loan SizeLoans Sold to Investors
    
    $
    216,946
    
    
    
    8.7
    %
    
    $
    199,634
    
    
    
    3.2
    %Loans Brokered to Third Party
Lenders
    
    $
    347,834
    
    
    
    17.6
    %
    
    $
    295,670
    
    
    
    15.3
    %
 35




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##### Table of Contents



For the Three Months Ended June 30,2007

    
    2006Change
    
    
    
    
    
    
    ChangeOpen Applications  Beginning
    
    
    17,648
    
    
    
    (24.0
    %)
    
    
    23,219
    
    
    
    (6.8
    %)New Applications
    
    
    27,549
    
    
    
    8.4
    %
    
    
    25,409
    
    
    
    (17.8
    %)Cancelled Applications
    
    
    (14,222
    )
    
    
    39.0
    %
    
    
    (10,229
    )
    
    
    3.8
    %Originated Loans
    
    
    (11,992
    )
    
    
    (20.0
    %)
    
    
    (14,982
    )
    
    
    (16.4
    %)Open Applications  Ending
    
    
    18,983
    
    
    
    (18.9
    %)
    
    
    23,417
    
    
    
    (16.5
    %)
  For the Three Months Ended June 30,2007

    
    2006Change
    
    
    
    
    
    
    ChangeOrigination Volume (in millions)
    
    $
    2,770.3
    
    
    
    (20.6
    %)
    
    $
    3,488.1
    
    
    
    (8.7
    %)Number of Originated LoansBuilder
    
    
    4,541
    
    
    
    (25.1
    %)
    
    
    6,065
    
    
    
    7.9
    %Retail
    
    
    7,451
    
    
    
    (16.4
    %)
    
    
    8,917
    
    
    
    (27.6
    %)11,992
    
    
    
    (20.0
    %)
    
    
    14,982
    
    
    
    (16.4
    %)Average Loan Size  Originated Loans
    
    $
    231,000
    
    
    
    (0.8
    %)
    
    $
    232,800
    
    
    
    9.2
    %
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##### Table of Contents



OTHER
   For the Three Months Ended June 30,2007

    
    2006Change
    
    
    
    
    
    
    ChangeOperating Earnings (Loss) from Home ServicesOperations
    
    $
    1,208
    
    
    
    (169.9
    %)
    
    $
    (1,728
    )
    
    
    (32.1
    %)Operating Earnings (Loss) from InvestmentReal Estate Operations
    
    
    
    
    
    
    (100.0
    %)
    
    
    (39
    )
    
    
    (62.5
    %)Interest Income and Other Revenue
    
    
    4,926
    
    
    
    100.0
    %
    
    
    
    
    
    
    Corporate General and Administrative Expense
    
    
    (44,981
    )
    
    
    (17.9
    %)
    
    
    (54,770
    )
    
    
    (4.4
    %)Operating Loss
    
    $
    (38,847
    )
    
    
    (31.3
    %)
    
    $
    (56,537
    )
    
    
    (9.6
    %)
   For the Three Months Ended June 30,2007

    
    2006Change
    
    
    
    
    
    
    ChangeCompensation and Benefits
    
    $
    35,631
    
    
    
    (31.1
    %)
    
    $
    51,730
    
    
    
    5.7
    %Professional Services
    
    
    3,168
    
    
    
    (2.8
    %)
    
    
    3,260
    
    
    
    (24.5
    %)Rent and Utilities
    
    
    1,674
    
    
    
    22.1
    %
    
    
    1,371
    
    
    
    0.9
    %Travel
    
    
    1,236
    
    
    
    (41.0
    %)
    
    
    2,095
    
    
    
    (1.9
    %)Other
    
    
    3,272
    
    
    
    (188.8
    %)
    
    
    (3,686
    )
    
    
    (216.4
    %)General and Administrative Expenses
    
    $
    44,981
    
    
    
    (17.9
    %)
    
    $
    54,770
    
    
    
    (4.4
    %)
  INCOME TAXES
  37




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##### Table of Contents



DISCONTINUED OPERATIONS
    Home Equity
  For the Three Months Ended June 30,2007
    
    
    2006 (1)Revenues
    
    $
    
    
    
    $
    152,943Operating Loss
    
    $
    
    
    
    $
    (24,742
    )
 (1)
    
    Amounts include the elimination of intercompany activity related to sales from CTX
Mortgage Company, LLC to Home Equity. Intercompany revenues and costs and expenses of
$1,395 thousand and $17 thousand, respectively, were eliminated.
 Construction Services
  For the Three Months Ended June 30,2007
    
    
    2006 (1)Revenues
    
    $
    
    
    
    $
    469,523Operating Earnings
    
    $
    
    
    
    $
    5,158Pre-tax Gain on Sale
    
    $
    5,463
    
    
    $
    
 (1)
    
    Amounts include the elimination of intersegment activity related to Construction
Services multi-unit residential vertical construction for Home Building. Intercompany
revenues and costs and expenses of $31,937 thousand and $30,284 thousand, respectively,
were eliminated.
  38




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##### Table of Contents



FINANCIAL CONDITION AND LIQUIDITY
  For the Three Months Ended June 30,2007
    
    
    2006Net Cash Provided by (Used in)Centex*Operating Activities
    
    $
    (533,393
    )
    
    $
    (850,138
    )Investing Activities
    
    
    (61,970
    )
    
    
    44,902Financing Activities
    
    
    (46,757
    )
    
    
    843,129(642,120
    )
    
    
    37,893Financial ServicesOperating Activities
    
    
    195,355
    
    
    
    425,718Investing Activities
    
    
    17,522
    
    
    
    (333,319
    )Financing Activities
    
    
    (220,267
    )
    
    
    (66,450
    )(7,390
    )
    
    
    25,949Centex Corporation and SubsidiariesOperating Activities
    
    
    (374,766
    )
    
    
    (416,604
    )Investing Activities
    
    
    (22,720
    )
    
    
    (310,463
    )Financing Activities
    
    
    (252,024
    )
    
    
    790,909Net (Decrease) Increase in Cash
    
    $
    (649,510
    )
    
    $
    63,842
 *
    
    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 that generally requires
significantly less equity to support their higher debt levels compared to the operations of
our other subsidiaries; the Financial Services subsidiaries and related companies have
structured their financing programs substantially on a stand alone basis; and Centex has
limited obligations with respect to the indebtedness of our Financial Services subsidiaries
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
  39




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##### Table of Contents



Discontinued Operations
    Future Cash Sources and Uses
  Existing Credit

    
    AvailableFacilities

    
    CapacityCentexMulti-Bank Revolving Credit FacilityRevolving Credit
    
    $
    1,250,000
    
    
    $
    1,250,000Letters of Credit
    
    
    835,000
    
    
    
    538,9482,085,000
    
    
    
    1,788,948
    (1) (2)Financial ServicesSecured Credit Facilities
    
    
    440,000
    
    
    
    351,170
    (3)Mortgage Conduit Facilities
    
    
    450,000
    
    
    
    185,000
    (4)Harwood Street Funding I, LLC Facility
    
    
    3,000,000
    
    
    
    1,895,6003,890,000
    
    
    
    2,431,770$
    5,975,000
    
    
    $
    4,220,718
 (1)
    
    This is an unsecured, committed, multi-bank revolving credit facility, maturing in July
2010, which serves as backup for Centex Corporations $1.25 billion commercial paper program
and provides $835 million of letter of credit capacity. As of June 30, 2007, the $1.25
billion commercial paper program had no amounts outstanding. There have been no direct
borrowings under this revolving credit facility since its
inception.(2)
    
    Centex maintains a minimum of $100 million in unused committed credit at all times in
conjunction with certain remaining surety bond obligations relating to Construction Services
projects commenced prior to the sale of Construction Services on March 30, 2007. Following
the sale of Construction Services, the purchaser has indemnified Centex for losses and Centex
has obtained a back-up indemnity from an AA- (S&P), Aa3
(Moodys) rated financial institution, which
indemnifies Centex against certain losses under any such letters of
credit.(3)
    
    CTX Mortgage Company, LLC maintains $440 million of secured, committed mortgage warehouse
facilities.(4)
    
    A wholly-owned limited purpose subsidiary of CTX Mortgage Company, LLC maintains secured,
committed facilities funded through commercial paper conduits to finance the purchase of
certain mortgage loans from CTX Mortgage Company, LLC.
 40




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##### Table of Contents



CentexShort-term Debt:Short-term Notes Payable
    
    $
    1,500Senior Debt:Medium-term Note Programs, weighted-average 5.61%, due
through 2008
    
    
    170,000Senior Notes, weighted-average 5.89%, due through 2017
    
    
    3,654,029Other Indebtedness, weighted-average 6.54%, due through 2018
    
    
    23,8253,849,354Financial ServicesShort-term Debt:Short-term Notes Payable
    
    
    353,831Harwood Street Funding I, LLC Secured Liquidity Notes
    
    
    1,042,723Harwood Street Funding I, LLC Variable Rate Subordinated Extendable
Certificates, weighted-average 7.32%, due through 2010
    
    
    60,0001,456,554$
    5,305,908
  Debt Type
    
    AmountCentexIssuances
    
    Other Indebtedness
    
    $
    0.4Retirements, net
    
    Senior Note
    
    
    (54.9
    )Other Indebtedness
    
    
    (0.3
    )Total
    
    
    
    $
    (54.8
    )
  41




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##### Table of Contents



CERTAIN OFF-BALANCE SHEET OBLIGATIONS
  Joint Ventures
    As ofJune 30, 2007
    
    
    March 31, 2007Number of Active Joint Ventures (1)
    
    
    43
    
    
    
    49Investment in Joint Ventures
    
    $
    273,872
    
    
    $
    281,644Total Joint Venture Debt (2)
    
    $
    897,370
    
    
    $
    1,000,599Centexs Share of Joint Venture Debt:Based on Centexs Ownership Percentage
    
    $
    365,494
    
    
    $
    412,397Based on Limited Debt Recourse Provisions:Limited Maintenance Guarantee (3) (5)
    
    $
    133,441
    
    
    $
    162,425Repayment Guarantee (4) (5)
    
    
    12,137
    
    
    
    12,055Total Limited Debt Recourse
    
    $
    145,578
    
    
    $
    174,480
 (1)
    
    The number of active 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 are the managing member of 23 and 28 of the active
joint ventures as of June 30, 2007 and March 31, 2007,
respectively.(2)
    
    As of June 30, 2007 and March 31, 2007, 21 of the active joint ventures have
outstanding debt.(3)
    
    We have guaranteed that certain of the joint ventures will maintain a specified
loan to value ratio. For certain joint ventures, we have contributed additional
capital in order to maintain loan to value requirements.(4)
    
    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.(5)
    
    These amounts represent our maximum exposure based on the joint ventures debt
at each respective date.
  42




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##### Table of Contents



CRITICAL ACCOUNTING ESTIMATES
  Inventory Valuation
   
    
    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), and
    
    estimated project life.
   43




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##### Table of Contents



Land Held Under Option Agreements Not Owned and Other Land Deposits
      
    
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,
    
evaluation of 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
  44




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##### Table of Contents



Warranty Accruals
  Loan Origination Reserve
   Insurance Accruals
  Income Taxes
    45




---



##### Table of Contents



RECENT ACCOUNTING PRONOUNCEMENTS
   
 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.
  46




---



##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
   
 Item 4. Controls and Procedures
  47




---



##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
   
 Item 1A. Risk Factors
  The lag between when we
acquire land and when we sell homes in our neighborhoods can make our operations susceptible to the
effects of rapid changes in market conditions
  Our income tax provision, liability for uncertain tax positions (FIN 48), and other tax reserves
may be insufficient if any taxing authorities are successful in asserting tax positions that are
contrary to our positions.
   48




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##### Table of Contents



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
    
    
    PlansPeriodApril 1-30
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    9,399,700May 1-31
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    9,399,700June 1-30
    
    
    6,270
    
    
    $
    40.07
    
    
    
    
    
    
    
    9,399,700Total (1)
    
    
    6,270
    
    
    $
    40.07
    
    
    
    
 (1)
    
    The 6,270 shares repurchased for the quarter ended June 30, 2007 represent the delivery to
the Company by employees or directors of previously issued shares to satisfy the exercise
price of options and/or withholding taxes that arise on the exercise of options or the vesting
of restricted stock. These transactions are authorized under the terms of the equity plans
under which the options or other equity were awarded; however, these transactions are not
considered repurchases pursuant to the Companys share repurchase program.
  
 Item 6. Exhibits
  3.1
    
Restated Articles of Incorporation of Centex Corporation
(Centex), as amended (incorporated by reference from Exhibit 3.1 to Centexs
Annual Report on Form 10-K for the fiscal year ended March 31, 2004).3.2
    
Amended and Restated By-Laws of Centex dated July 12, 2007
(incorporated by reference from Exhibit 3.1 to Centexs Current Report on Form
8-K filed on July 17, 2007).4.1
    
Any instrument with respect to long-term debt, where the
securities authorized thereunder do not exceed 10% of the total assets of Centex
and its subsidiaries, has not been filed; these instruments relate to (a)
long-term senior 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, 2007, 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
    
Form of stock option award for 2001 Stock Plan (incorporated by
reference from Exhibit 10.4 to Centexs Current Report on Form 8-K filed on May
16, 2007).*10.2
    
Form of stock unit award agreement for Long-Term Incentive Plan
(incorporated by reference from Exhibit 10.4a to Centexs Annual Report on Form
10-K for the fiscal year ended March 31, 2007).*
 49




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##### Table of Contents



10.3
    
Form of award agreement for 2003 Annual Incentive Compensation
Plan (incorporated by reference from Exhibit 10.2 to Centexs Current Report on
Form 8-K filed on May 23, 2007).*10.4
    
Form of stock award option agreement for 2003 Equity Incentive Plan
(incorporated by reference from Exhibit 10.6a to Centexs Annual Report on Form
10-K for the fiscal year ended March 31, 2007).*10.5
    
Form of stock unit award agreement for 2003 Equity Incentive Plan
(incorporated by reference from Exhibit 10.6 to Centexs Current Report on Form
8-K filed on May 16, 2007).*10.6
    
Form of restricted stock award agreement for 2003 Equity
Incentive Plan (incorporated by reference from Exhibit 10.5 to Centexs Current
Report on Form 8-K filed on May 16, 2007).*10.7
    
Form of deferred compensation agreement for the Executive
Deferred Compensation Plan (incorporated by reference from Exhibit 10.9a to
Centexs Annual Report on Form 10-K for the fiscal year ended March 31, 2007).*10.8
    
Form of long term performance unit award for 2003 Equity
Incentive Plan (May 2007 award) (incorporated by reference from Exhibit 10.4 to
Centexs Current Report on Form 8-K filed on May 23, 2007).*10.9
    
Credit Support Annex, dated July 18, 2007, between Centex
Corporation and Bank of America, N.A. (incorporated by reference from Exhibit
10.4 to Centexs Current Report on Form 8-K filed on July 23, 2007).10.10
    
Credit Support Annex, dated July 18, 2007, between Centex
Corporation and JPMorgan Chase Bank, N.A. (incorporated by reference from
Exhibit 10.5 to Centexs Current Report on Form 8-K filed on July 23, 2007).10.11
    
Credit Support Annex, dated July 18, 2007, between Centex
Corporation and Calyon New York Branch (incorporated by reference from Exhibit
10.6 to Centexs Current Report on Form 8-K filed on July 23, 2007).10.12
    
Second Amendment to Credit Agreement, dated July 20, 2007, among
Centex Corporation, Bank of America, N.A., as Administrative Agent, and the
lenders named therein (incorporated by reference from Exhibit 10.3 to Centexs
Current Report on Form 8-K filed on July 23, 2007).12.1
    
Computation of Ratio of Earnings to Fixed Charges.31.1
    
Certification of the Chief Executive Officer of Centex
Corporation pursuant to Rules 13a-14 and 15d-14 promulgated under the
Securities Exchange Act of 1934, as amended.31.2
    
Certification of the Chief Financial Officer of Centex
Corporation pursuant to Rules 13a-14 and 15d-14 promulgated under the
Securities Exchange Act of 1934, as amended.32.1
    
Certification of the Chief Executive Officer of Centex
Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.32.2
    
Certification of the Chief Financial Officer of Centex
Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
 *
    
    Management contract or compensatory plan or arrangement.
 50




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##### Table of Contents



Signatures
  CENTEX CORPORATIONRegistrantJuly 31, 2007
    
    /s/ Catherine R. SmithCatherine R. SmithExecutive Vice President and Chief Financial Officer(principal financial officer)July 31, 2007
    
    /s/ Mark D. KempMark D. KempSenior Vice President-Controller(principal accounting officer)
 51