##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
DECEMBER 31, 2005
 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
 December 31, 2005
 PART I  FINANCIAL INFORMATIONItem 1.
    
    Financial Statements
    
    
    2Statements of Consolidated Earnings
    
    
    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
    
    
    25Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    47Item 4.
    
    Controls and Procedures
    
    
    47PART
II  OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    47Item 1a.
    
    Risk Factors
    
    
    47Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    49Item 6.
    
    Exhibits
    
    
    49Signatures
    
    
    
    
    51Computation of Ratio of Earnings to Fixed ChargesCertification of CEO Pursuant to Rule 13a-14 and 15d-14Certification of CFO Pursuant to Rule 13a-14 and 15d-14Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906
  1




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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 December 31,2005
    
    
    2004RevenuesHome Building
    
    $
    3,003,650
    
    
    $
    2,239,451Financial Services
    
    
    326,077
    
    
    
    266,701Construction Services
    
    
    402,927
    
    
    
    445,468Other, including Intersegment Eliminations
    
    
    5,713
    
    
    
    38,0753,738,367
    
    
    
    2,989,695Costs and ExpensesHome Building
    
    
    2,547,629
    
    
    
    1,935,720Financial Services
    
    
    272,128
    
    
    
    220,698Construction Services
    
    
    396,516
    
    
    
    439,573Other, including Intersegment Eliminations
    
    
    8,271
    
    
    
    31,737Corporate General and Administrative
    
    
    26,775
    
    
    
    23,137Interest Expense
    
    
    3,009
    
    
    
    4,9613,254,328
    
    
    
    2,655,826Earnings from Unconsolidated Entities
    
    
    48,957
    
    
    
    43,947Earnings from Continuing Operations Before Income Taxes
    
    
    532,996
    
    
    
    377,816Income Taxes
    
    
    200,247
    
    
    
    135,858Earnings from Continuing Operations
    
    
    332,749
    
    
    
    241,958Earnings
(Loss) from Discontinued Operations, net ofTaxes (Benefit) of $(835) and $4,257
    
    
    (3,405
    )
    
    
    11,813Net Earnings
    
    $
    329,344
    
    
    $
    253,771Basic Earnings Per ShareContinuing Operations
    
    $
    2.63
    
    
    $
    1.93Discontinued Operations
    
    
    (0.03
    )
    
    
    0.09$
    2.60
    
    
    $
    2.02Diluted Earnings Per ShareContinuing Operations
    
    $
    2.52
    
    
    $
    1.82Discontinued Operations
    
    
    (0.03
    )
    
    
    0.09$
    2.49
    
    
    $
    1.91Average Shares OutstandingBasic
    
    
    126,572,663
    
    
    
    125,593,379Dilutive Securities:Options
    
    
    5,307,073
    
    
    
    6,747,733Other
    
    
    198,027
    
    
    
    206,078Diluted
    
    
    132,077,763
    
    
    
    132,547,190Cash 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 Earnings
 
 For the Nine Months Ended December 31,2005
    
    
    2004RevenuesHome Building
    
    $
    8,291,236
    
    
    $
    6,270,124Financial Services
    
    
    956,145
    
    
    
    817,945Construction Services
    
    
    1,160,904
    
    
    
    1,331,913Other, including Intersegment Eliminations
    
    
    53,570
    
    
    
    121,79210,461,855
    
    
    
    8,541,774Costs and ExpensesHome Building
    
    
    7,054,047
    
    
    
    5,470,701Financial Services
    
    
    800,735
    
    
    
    661,116Construction Services
    
    
    1,148,023
    
    
    
    1,317,088Other, including Intersegment Eliminations
    
    
    61,776
    
    
    
    110,414Corporate General and Administrative
    
    
    70,935
    
    
    
    61,741Interest Expense
    
    
    8,705
    
    
    
    14,0789,144,221
    
    
    
    7,635,138Earnings from Unconsolidated Entities
    
    
    67,585
    
    
    
    56,059Earnings from Continuing Operations Before Income Taxes
    
    
    1,385,219
    
    
    
    962,695Income Taxes
    
    
    490,498
    
    
    
    345,531Earnings from Continuing Operations
    
    
    894,721
    
    
    
    617,164Earnings
from Discontinued Operations, net of Taxes of $18,888 and $11,147
    
    
    2,823
    
    
    
    24,452Net Earnings
    
    $
    897,544
    
    
    $
    641,616Basic Earnings Per ShareContinuing Operations
    
    $
    7.00
    
    
    $
    4.96Discontinued Operations
    
    
    0.02
    
    
    
    0.20$
    7.02
    
    
    $
    5.16Diluted Earnings Per ShareContinuing Operations
    
    $
    6.68
    
    
    $
    4.69Discontinued Operations
    
    
    0.02
    
    
    
    0.18$
    6.70
    
    
    $
    4.87Average Shares OutstandingBasic
    
    
    127,933,898
    
    
    
    124,404,141Dilutive Securities:Options
    
    
    5,578,959
    
    
    
    6,863,476Other
    
    
    441,420
    
    
    
    435,136Diluted
    
    
    133,954,277
    
    
    
    131,702,753Cash Dividends Per Share
    
    $
    0.12
    
    
    $
    0.12
 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 SubsidiariesDecember 31, 2005
    
    
    March 31, 2005AssetsCash and Cash Equivalents
    
    $
    78,900
    
    
    $
    502,586Restricted Cash
    
    
    469,113
    
    
    
    377,789Receivables -Residential Mortgage Loans Held for Investment, net
    
    
    8,758,681
    
    
    
    7,914,426Residential Mortgage Loans Held for Sale
    
    
    1,727,631
    
    
    
    1,775,324Construction Contracts
    
    
    307,545
    
    
    
    302,035Trade, including Notes of $33,487 and $57,071
    
    
    435,310
    
    
    
    490,199Inventories -Housing Projects
    
    
    8,292,195
    
    
    
    6,234,005Land Held for Development and Sale
    
    
    381,100
    
    
    
    205,190Land Held Under Option Agreements Not Owned
    
    
    552,984
    
    
    
    456,917Other
    
    
    10,405
    
    
    
    33,439Investments -Joint Ventures and Other
    
    
    344,282
    
    
    
    163,944Financial Services
    
    
    
    
    
    
    Property and Equipment, net
    
    
    162,032
    
    
    
    159,722Other Assets -Deferred Income Taxes
    
    
    348,523
    
    
    
    180,127Goodwill
    
    
    218,369
    
    
    
    216,537Mortgage Securitization Residual Interest
    
    
    64,582
    
    
    
    70,120Deferred Charges and Other, net
    
    
    272,837
    
    
    
    251,459Assets of Discontinued Operations
    
    
    
    
    
    
    677,260$
    22,424,489
    
    
    $
    20,011,079Liabilities and Stockholders EquityAccounts Payable
    
    $
    824,883
    
    
    $
    590,276Accrued Liabilities
    
    
    1,620,296
    
    
    
    1,519,390Debt -Centex
    
    
    4,106,579
    
    
    
    3,107,917Financial Services
    
    
    10,583,348
    
    
    
    9,721,146Payables to (Receivables from) Affiliates
    
    
    
    
    
    
    Liabilities of Discontinued Operations
    
    
    
    
    
    
    334,072Commitments and ContingenciesMinority Interests
    
    
    538,911
    
    
    
    457,521Stockholders Equity -Preferred Stock: Authorized 5,000,000 Shares, None
Issued
    
    
    
    
    
    
    Common Stock: $.25 Par Value; Authorized 300,000,000
Shares; Outstanding 123,786,142 and 127,729,275
Shares
    
    
    33,956
    
    
    
    33,327Capital in Excess of Par Value
    
    
    532,440
    
    
    
    407,995Unamortized Value of Deferred Compensation
    
    
    (49
    )
    
    
    (197
    )Retained Earnings
    
    
    4,864,468
    
    
    
    3,982,306Treasury Stock, at Cost; 12,038,622 and 5,577,686 Shares
    
    
    (688,017
    )
    
    
    (213,801
    )Accumulated Other Comprehensive Income
    
    
    7,674
    
    
    
    71,127Total Stockholders Equity
    
    
    4,750,472
    
    
    
    4,280,757$
    22,424,489
    
    
    $
    20,011,079
 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 ServicesDecember 31, 2005
    
    
    March 31, 2005
    
    
    December 31, 2005
    
    
    March 31, 2005$
    66,384
    
    
    $
    490,308
    
    
    $
    12,516
    
    
    $
    12,27874,858
    
    
    
    53,339
    
    
    
    394,255
    
    
    
    324,450
    
    
    
    
    
    
    
    8,758,681
    
    
    
    7,914,426
    
    
    
    
    
    
    
    1,727,631
    
    
    
    1,775,324307,545
    
    
    
    302,035
    
    
    
    
    
    
    
    232,004
    
    
    
    292,630
    
    
    
    203,306
    
    
    
    197,5698,292,195
    
    
    
    6,234,005
    
    
    
    
    
    
    
    381,100
    
    
    
    205,190
    
    
    
    
    
    
    
    552,984
    
    
    
    456,917
    
    
    
    
    
    
    
    4,666
    
    
    
    27,133
    
    
    
    5,739
    
    
    
    6,306344,282
    
    
    
    163,944
    
    
    
    
    
    
    
    700,862
    
    
    
    572,290
    
    
    
    
    
    
    
    120,404
    
    
    
    116,487
    
    
    
    41,628
    
    
    
    43,235191,794
    
    
    
    161,055
    
    
    
    156,729
    
    
    
    19,072206,632
    
    
    
    204,800
    
    
    
    11,737
    
    
    
    11,737
    
    
    
    
    
    
    
    64,582
    
    
    
    70,120206,205
    
    
    
    172,100
    
    
    
    66,632
    
    
    
    79,359
    
    
    
    677,260
    
    
    
    
    
    
    
    $
    11,681,915
    
    
    $
    10,129,493
    
    
    $
    11,443,436
    
    
    $
    10,453,876$
    819,895
    
    
    $
    569,100
    
    
    $
    4,988
    
    
    $
    21,1761,467,637
    
    
    
    1,381,488
    
    
    
    152,659
    
    
    
    137,9024,106,579
    
    
    
    3,107,917
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,583,348
    
    
    
    9,721,146
    
    
    
    
    
    
    
    20,282
    
    
    
    (44,958
    )
    
    
    
    334,072
    
    
    
    
    
    
    
    537,332
    
    
    
    456,159
    
    
    
    1,579
    
    
    
    1,362
    
    
    
    
    
    
    
    
    
    
    
    33,956
    
    
    
    33,327
    
    
    
    1
    
    
    
    1532,440
    
    
    
    407,995
    
    
    
    275,467
    
    
    
    275,467(49
    )
    
    
    (197
    )
    
    
    
    
    
    
    4,864,468
    
    
    
    3,982,306
    
    
    
    397,383
    
    
    
    333,568(688,017
    )
    
    
    (213,801
    )
    
    
    
    
    
    
    7,674
    
    
    
    71,127
    
    
    
    7,729
    
    
    
    8,2124,750,472
    
    
    
    4,280,757
    
    
    
    680,580
    
    
    
    617,248$
    11,681,915
    
    
    $
    10,129,493
    
    
    $
    11,443,436
    
    
    $
    10,453,876
 *
    
    In the supplemental data presented above, Centex represents the consolidation of all
subsidiaries other than those included in Financial Services. Transactions between Centex
and Financial Services have been eliminated from the Centex Corporation and Subsidiaries
balance sheets.
 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 Nine Months Ended December 31,2005
    
    
    2004Cash Flows  Operating ActivitiesNet Earnings
    
    $
    897,544
    
    
    $
    641,616Adjustments-Depreciation and Amortization
    
    
    49,441
    
    
    
    43,125Stock-based Compensation
    
    
    51,326
    
    
    
    36,583Provision
for Losses on Residential Mortgage Loans Held for Investment
    
    
    68,032
    
    
    
    71,941Deferred Income Tax (Benefit) Provision
    
    
    (166,994
    )
    
    
    22,833Undistributed Earnings of Joint Ventures
    
    
    21,955
    
    
    
    33,685Undistributed Earnings of Financial Services
    
    
    
    
    
    
    Minority Interest, net of Taxes
    
    
    (517
    )
    
    
    825Gain on Sale of Discontinued Operations
    
    
    (6,500
    )
    
    
    Changes in Assets and Liabilities, Excluding Effect of Dispositions(Increase) Decrease in Restricted Cash
    
    
    (91,324
    )
    
    
    (135,598
    )Decrease (Increase) in Receivables
    
    
    26,379
    
    
    
    (44,219
    )Decrease in Residential Mortgage Loans Held for Sale
    
    
    47,693
    
    
    
    233,963Increase in Housing Projects and Land Held for Development and Sale
    
    
    (2,254,858
    )
    
    
    (1,823,266
    )(Increase) Decrease in Other Inventories
    
    
    (163
    )
    
    
    47,167Increase (Decrease) in Accounts Payable and Accrued Liabilities
    
    
    311,776
    
    
    
    101,380(Increase) Decrease in Other Assets, net
    
    
    (24,938
    )
    
    
    16,735Increase (Decrease) in Payables to Affiliates
    
    
    
    
    
    
    Other
    
    
    2,447
    
    
    
    (3,231
    )(1,068,701
    )
    
    
    (756,461
    )Cash Flows  Investing ActivitiesPayment on Notes Receivable, net
    
    
    23,584
    
    
    
    177Increase in Residential Mortgage Loans Held for Investment
    
    
    (912,287
    )
    
    
    (1,296,615
    )Investments in and Advances to Joint Ventures
    
    
    (316,085
    )
    
    
    (164,094
    )Distributions from Joint Ventures
    
    
    134,740
    
    
    
    122,519(Increase) Decrease in Investment and Advances to Financial Services
    
    
    
    
    
    
    Purchases of Property and Equipment, net
    
    
    (42,998
    )
    
    
    (30,183
    )Proceeds from Dispositions
    
    
    327,415
    
    
    
    9,267Other
    
    
    (2,857
    )
    
    
    (896
    )(788,488
    )
    
    
    (1,359,825
    )Cash Flows  Financing ActivitiesIncrease in
Short-term Debt, net
    
    
    1,781,738
    
    
    
    1,501,002CentexIssuance of Long-term Debt
    
    
    972,049
    
    
    
    722,759Repayment of Long-term Debt
    
    
    (327,153
    )
    
    
    (41,121
    )Financial ServicesIssuance of Long-term Debt
    
    
    2,008,372
    
    
    
    1,867,799Repayment of Long-term Debt
    
    
    (2,539,019
    )
    
    
    (2,106,145
    )Proceeds from Stock Option Exercises
    
    
    28,593
    
    
    
    57,899Treasury Stock Transactions, net
    
    
    (474,216
    )
    
    
    (572
    )Dividends Paid
    
    
    (15,382
    )
    
    
    (14,848
    )1,434,982
    
    
    
    1,986,773Effect of Exchange Rate on Cash
    
    
    (1,479
    )
    
    
    977Net (Decrease) Increase in Cash and Cash Equivalents
    
    
    (423,686
    )
    
    
    (128,536
    )Cash and Cash Equivalents at Beginning of Period(1)
    
    
    502,586
    
    
    
    178,859Cash and Cash Equivalents at End of Period(2)
    
    $
    78,900
    
    
    $
    50,323
 See Notes to Consolidated Financial Statements.
 (1)
    
    Amount includes cash and cash equivalents of discontinued operation of $199 as of March 31,
2004.(2)
    
    Amount includes cash and cash equivalents of discontinued operation of $12,276 as of December
31, 2004.
 6




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##### Table of Contents



Centex Corporation and Subsidiaries
Statements of Consolidated Cash Flows with Consolidating Details
 
 Centex *
    
    
    Financial ServicesFor the Nine Months Ended December 31,
    
    
    For the Nine Months Ended December 31,2005
    
    
    2004
    
    

2005
    
    
    2004$
    897,544
    
    
    $
    641,616
    
    
    $
    88,815
    
    
    $
    98,03936,035
    
    
    
    29,756
    
    
    
    13,406
    
    
    
    13,36951,326
    
    
    
    36,583
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    68,032
    
    
    
    71,941(28,981
    )
    
    
    14,689
    
    
    
    (138,013
    )
    
    
    8,14421,955
    
    
    
    33,685
    
    
    
    
    
    
    
    (63,815
    )
    
    
    (59,039
    )
    
    
    
    
    
    
    (734
    )
    
    
    750
    
    
    
    217
    
    
    
    75(6,500
    )
    
    
    
    
    
    
    
    
    
    
    (21,519
    )
    
    
    5,243
    
    
    
    (69,805
    )
    
    
    (140,841
    )32,295
    
    
    
    (20,673
    )
    
    
    (5,916
    )
    
    
    (23,546
    )
    
    
    
    
    
    
    
    47,693
    
    
    
    233,963(2,254,858
    )
    
    
    (1,823,266
    )
    
    
    
    
    
    
    (730
    )
    
    
    44,400
    
    
    
    567
    
    
    
    2,767313,207
    
    
    
    172,417
    
    
    
    (1,222
    )
    
    
    (59,740
    )(43,559
    )
    
    
    (9,151
    )
    
    
    18,621
    
    
    
    25,886
    
    
    
    
    
    
    
    64,548
    
    
    
    (29,299
    )2,447
    
    
    
    
    
    
    
    
    
    
    
    (3,231
    )(1,065,887
    )
    
    
    (932,990
    )
    
    
    86,943
    
    
    
    197,52723,405
    
    
    
    158
    
    
    
    179
    
    
    
    19
    
    
    
    
    
    
    
    (912,287
    )
    
    
    (1,296,615
    )(316,085
    )
    
    
    (164,094
    )
    
    
    
    
    
    
    134,740
    
    
    
    122,519
    
    
    
    
    
    
    
    (64,757
    )
    
    
    18,002
    
    
    
    
    
    
    
    (31,199
    )
    
    
    (13,320
    )
    
    
    (11,799
    )
    
    
    (16,863
    )327,415
    
    
    
    
    
    
    
    
    
    
    
    9,267(2,857
    )
    
    
    (896
    )
    
    
    
    
    
    
    70,662
    
    
    
    (37,631
    )
    
    
    (923,907
    )
    
    
    (1,304,192
    )388,889
    
    
    
    122,074
    
    
    
    1,392,849
    
    
    
    1,378,928972,049
    
    
    
    722,759
    
    
    
    
    
    
    
    (327,153
    )
    
    
    (41,121
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,008,372
    
    
    
    1,867,799
    
    
    
    
    
    
    
    (2,539,019
    )
    
    
    (2,106,145
    )28,593
    
    
    
    57,899
    
    
    
    
    
    
    
    (474,216
    )
    
    
    (572
    )
    
    
    
    
    
    
    (15,382
    )
    
    
    (14,848
    )
    
    
    (25,000
    )
    
    
    (39,000
    )572,780
    
    
    
    846,191
    
    
    
    837,202
    
    
    
    1,101,582(1,479
    )
    
    
    977
    
    
    
    
    
    
    
    (423,924
    )
    
    
    (123,453
    )
    
    
    238
    
    
    
    (5,083
    )490,308
    
    
    
    160,590
    
    
    
    12,278
    
    
    
    18,269$
    66,384
    
    
    $
    37,137
    
    
    $
    12,516
    
    
    $
    13,186
 *
    
    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




---



##### Table of Contents



Centex Corporation and Subsidiaries
 
 Notes to Consolidated
Financial Statements
December 31, 2005
 
 (A) BASIS OF PRESENTATION
   (B) STATEMENTS OF CONSOLIDATED CASH FLOWS  SUPPLEMENTAL DISCLOSURES
  For the Three Months
    
    
    For the Nine MonthsEnded December 31,
    
    
    Ended December 31,2005
    
    
    2004
    
    
    2005
    
    
    2004Cash Paid for Interest
    
    $
    163,326
    
    
    $
    113,105
    
    
    $
    463,755
    
    
    $
    323,607Net Cash Paid for Taxes
    
    $
    174,896
    
    
    $
    90,445
    
    
    $
    600,926
    
    
    $
    265,339
  For the Three Months
    
    
    For the Nine MonthsEnded December 31,
    
    
    Ended December 31,2005
    
    
    2004
    
    
    2005
    
    
    2004Total Interest Incurred
    
    $
    176,250
    
    
    $
    121,867
    
    
    $
    490,244
    
    
    $
    343,206Less  Interest Capitalized
    
    
    (57,162
    )
    
    
    (44,647
    )
    
    
    (163,372
    )
    
    
    (126,705
    )Financial Services Interest Expense
    
    
    (116,079
    )
    
    
    (72,259
    )
    
    
    (318,167
    )
    
    
    (202,423
    )Interest Expense, net
    
    $
    3,009
    
    
    $
    4,961
    
    
    $
    8,705
    
    
    $
    14,078Capitalized Interest Relieved to Home
Buildings Costs and Expenses
    
    $
    40,241
    
    
    $
    31,014
    
    
    $
    115,334
    
    
    $
    88,859
 8




---



##### Table of Contents



Sales Proceeds
    
    $
    318,717Assets Sold
    
    
    (632,956
    )Liabilities Assumed by Buyer
    
    
    118,951Long-term Debt Assumed by Buyer
    
    
    153,434Cumulative Foreign Currency Gain
    
    
    48,354Pre-tax Gain on Sale
    
    
    6,500Income Tax Expense
    
    
    (15,660
    )Net Loss on Sale
    
    $
    (9,160
    )
   (C) STOCK-BASED COMPENSATION ARRANGEMENTS
     9




---



##### Table of Contents



(D) STOCKHOLDERS EQUITY
  Unamortized
    
    
    
    
    
    
    
    
    
    
    AccumulatedCapital in
    
    
    Value of
    
    
    
    
    
    
    Treasury
    
    
    OtherCommon Stock
    
    
    Excess of
    
    
    Deferred
    
    
    Retained
    
    
    Stock,
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Par Value
    
    
    Compensation
    
    
    Earnings
    
    
    at Cost
    
    
    Income (Loss)
    
    
    TotalBalance, March 31, 2005
    
    
    127,729
    
    
    $
    33,327
    
    
    $
    407,995
    
    
    $
    (197
    )
    
    $
    3,982,306
    
    
    $
    (213,801
    )
    
    $
    71,127
    
    
    $
    4,280,757Issuance of Restricted
Stock
    
    
    249
    
    
    
    62
    
    
    
    (62
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock Compensation
    
    
    
    
    
    
    
    
    
    
    51,178
    
    
    
    148
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51,326Exercise of Stock
Options, Including
Tax Benefits
    
    
    2,267
    
    
    
    567
    
    
    
    81,919
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    82,486Cash Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,382
    )
    
    
    
    
    
    
    
    
    
    
    (15,382
    )Purchase of Common
Stock for Treasury
    
    
    (6,778
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (478,900
    )
    
    
    
    
    
    
    (478,900
    )Other Stock
Transactions
    
    
    319
    
    
    
    
    
    
    
    (8,590
    )
    
    
    
    
    
    
    
    
    
    
    4,684
    
    
    
    
    
    
    
    (3,906
    )Net Earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    897,544
    
    
    
    
    
    
    
    
    
    
    
    897,544Unrealized Loss
on Hedging
Instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (710
    )
    
    
    (710
    )Foreign Currency
Translation
Adjustments (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (62,743
    )
    
    
    (62,743
    )Balance, December 31,
2005
    
    
    123,786
    
    
    $
    33,956
    
    
    $
    532,440
    
    
    $
    (49
    )
    
    $
    4,864,468
    
    
    $
    (688,017
    )
    
    $
    7,674
    
    
    $
    4,750,472
 (1)
    
    Amount includes a reclassification adjustment of $48,354 for foreign currency
gain included in net earnings.
 (E) RESIDENTIAL MORTGAGE LOANS HELD FOR INVESTMENT
  December 31, 2005
    
    
    March 31, 2005Residential Mortgage Loans Held for Investment
    
    $
    8,851,538
    
    
    $
    7,999,728Allowance for Losses on Residential Mortgage Loans
Held for Investment
    
    
    (92,857
    )
    
    
    (85,302
    )Residential Mortgage Loans Held for Investment,
net of Allowance for Losses
    
    $
    8,758,681
    
    
    $
    7,914,426
  For the Nine Months Ended
    
    
    For the Year EndedDecember 31, 2005
    
    
    March 31, 2005Balance at Beginning of Period
    
    $
    85,302
    
    
    $
    56,358Provision for Losses
    
    
    68,032
    
    
    
    98,801Losses Sustained, net of Recoveries of
$953 and $1,226
    
    
    (60,477
    )
    
    
    (69,857
    )Balance at End of Period
    
    $
    92,857
    
    
    $
    85,302
 10




---



##### Table of Contents



December 31, 2005
    
    
    March 31, 2005Allowance as a Percentage of Gross Loans
Held for Investment
    
    
    1.1
    %
    
    
    1.1
    %Allowance as a Percentage of 90+ Days
Contractual Delinquency
    
    
    37.5
    %
    
    
    44.2
    %90+ Days Contractual Delinquency
(based on months)
Total Dollars Delinquent
    
    $
    247,405
    
    
    $
    192,835% Delinquent
    
    
    2.8
    %
    
    
    2.4
    %
 (F) GOODWILL
  ConstructionHome Building
    
    
    Financial Services
    
    
    Services
    
    
    Other
    
    
    TotalBalance as of March 31, 2005
    
    $
    121,501
    
    
    $
    11,737
    
    
    $
    1,007
    
    
    $
    82,292
    
    
    $
    216,537Goodwill Acquired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,832
    
    
    
    1,832Balance as of December 31, 2005
    
    $
    121,501
    
    
    $
    11,737
    
    
    $
    1,007
    
    
    $
    84,124
    
    
    $
    218,369
  11




---



##### Table of Contents



(G) INDEBTEDNESS
  December 31, 2005
    
    

March 31, 2005Weighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    AverageInterest
    
    
    
    
    
    
    InterestRate
    
    
    
    
    
    
    RateShort-term Debt:Centex
    
    $
    396,759
    
    
    
    4.49
    %
    
    $
    7,870
    
    
    
    1.72
    %Financial ServicesFinancial Institutions
    
    
    557,608
    
    
    
    4.62
    %
    
    
    190,779
    
    
    
    3.12
    %Medium-term Notes:Harwood Street Funding I, LLC
    
    
    
    
    
    
    
    %
    
    
    250,000
    
    
    
    2.90
    %Harwood Street Funding II, LLC
    
    
    200,000
    
    
    
    4.44
    %
    
    
    
    
    
    
    
    %Secured Liquidity Notes:Harwood Street Funding I, LLC
    
    
    1,315,714
    
    
    
    4.36
    %
    
    
    1,195,076
    
    
    
    2.89
    %Harwood Street Funding II, LLC
    
    
    1,787,403
    
    
    
    4.40
    %
    
    
    832,021
    
    
    
    2.99
    %Consolidated Short-term Debt
    
    
    4,257,484
    
    
    
    
    
    
    
    2,475,746Long-term Debt:CentexMedium-term Note Programs, due through 2008
    
    
    373,000
    
    
    
    5.74
    %
    
    
    398,000
    
    
    
    4.59
    %Senior Notes, due through 2016
    
    
    3,208,708
    
    
    
    5.79
    %
    
    
    2,458,547
    
    
    
    6.32
    %Other Indebtedness, due through 2015
    
    
    28,214
    
    
    
    5.54
    %
    
    
    43,670
    
    
    
    5.57
    %Subordinated Debt:Subordinated Debentures, due in 2007
    
    
    99,898
    
    
    
    8.75
    %
    
    
    99,838
    
    
    
    8.75
    %Subordinated Debentures, due in 2006
    
    
    
    
    
    
    
    %
    
    
    99,992
    
    
    
    7.38
    %3,709,820
    
    
    
    
    
    
    
    3,100,047Financial ServicesHome Equity Asset-Backed Certificates,
due through 2036
    
    
    6,512,623
    
    
    
    4.95
    %
    
    
    7,099,520
    
    
    
    3.63
    %Harwood Street Funding I, LLC Variable Rate
Subordinated Extendable Certificates,
due through 2010
    
    
    60,000
    
    
    
    6.39
    %
    
    
    60,000
    
    
    
    4.87
    %Harwood Street Funding II, LLC Variable
Rate Subordinated Notes, due through 2011
    
    
    150,000
    
    
    
    6.25
    %
    
    
    93,750
    
    
    
    5.02
    %6,722,623
    
    
    
    
    
    
    
    7,253,270Consolidated Long-term Debt
    
    
    10,432,443
    
    
    
    
    
    
    
    10,353,317Total Debt
    
    $
    14,689,927
    
    
    
    
    
    
    $
    12,829,063
  12




---



##### Table of Contents



For the Nine Months Ended December 31,2005
    
    
    2004Short-term Debt:Centex
    
    
    3.78%
    
    
    
    1.65%Financial Services
    
    
    3.76%
    
    
    
    2.02%Long-term Debt:CentexMedium-term Note Programs (1)
    
    
    5.41%
    
    
    
    5.52%Senior Notes
    
    
    5.91%
    
    
    
    6.49%Other Indebtedness
    
    
    5.34%
    
    
    
    5.10%Subordinated Debentures
    
    
    8.50%
    
    
    
    8.06%Financial ServicesCentex Home Equity Company, LLC Long-term Debt (2)
    
    
    4.47%
    
    
    
    3.30%CTX Mortgage Company, LLC Long-term Debt (3)
    
    
    5.60%
    
    
    
    3.58%
 (1)
    
    Interest rates include the effects of an interest rate swap
agreement.(2)
    
    Consists of Centex Home Equity Company, LLC Asset-Backed
Certificates and Harwood Street Funding II, LLC Variable Rate
Subordinated Notes.(3)
    
    Consists of Harwood Street Funding I, LLC Variable Rate
Subordinated Extendable Certificates.
  Centex
    
    
    Financial Services
    
    
    Total2006
    
    $
    15,920
    
    
    $
    936,662
    
    
    $
    952,5822007
    
    
    292,351
    
    
    
    2,898,026
    
    
    
    3,190,3772008
    
    
    527,233
    
    
    
    1,378,732
    
    
    
    1,905,9652009
    
    
    150,130
    
    
    
    579,005
    
    
    
    729,1352010
    
    
    225,072
    
    
    
    734,787
    
    
    
    959,859Thereafter
    
    
    2,499,114
    
    
    
    195,411
    
    
    
    2,694,525$
    3,709,820
    
    
    $
    6,722,623
    
    
    $
    10,432,443
   13




---



##### Table of Contents



Credit Facilities
  Existing Credit
    
    
    AvailableFacilities
    
    
    CapacityCentexMulti-Bank Revolving Credit FacilityRevolving Credit
    
    $
    1,000,000
    
    
    $
    610,000Letters of Credit
    
    
    500,000
    
    
    
    139,4751,500,000
    
    
    
    749,475
    (1) (2)Unsecured Credit Facility
    
    
    150,000
    
    
    
    150,000
    (3)1,650,000
    
    
    
    899,475Financial ServicesMortgage Servicer Advance Facility
    
    
    100,000
    
    
    
    17,653
    (4)Secured Credit Facilities
    
    
    990,000
    
    
    
    514,739
    (5)Harwood
Street Funding I, LLC Facility
    
    3,000,000
    
    
    1,622,800Harwood
Street Funding II, LLC Facility
    
    4,000,000
    
    
    1,862,5978,090,000
    
    
    
    4,017,789$
    9,740,000
    
    
    $
    4,917,264
    (6)
 (1)
    
    This is an unsecured, committed, multi-bank revolving credit facility, maturing in July
2010, which serves as backup for Centex Corporations $900 million commercial paper program
and provides $500 million of letter of credit capacity. As of December 31, 2005, the $900
million commercial paper program had $390 million outstanding which has been deducted from the
available capacity under the back-up facility. There have been no direct borrowings under
this revolving credit facility since its inception.(2)
    
    In conjunction with the issuance of surety bonds in support of Construction Services
activity, Centex Corporation has agreed to provide letters of credit of up to $100 million if
Centex Corporations public debt ratings fall below investment grade. In support of this
ratings trigger, the Company maintains a minimum of $100 million in unused committed credit at
all times.(3)
    
    Centex Corporation maintains a $150 million unsecured, uncommitted credit facility.(4)
    
    Under this facility, Home Equity is permitted to securitize its mortgage servicer advances in
an amount up to $100 million with a final maturity of May 2011. This facility has no recourse
to Centex Corporation.(5)
    
    CTX Mortgage Company, LLC and its related companies and Home Equity share in a $300 million
secured, committed credit facility to finance mortgage inventory. CTX Mortgage Company, LLC
and its related companies also maintain $690 million of secured, committed mortgage warehouse
facilities to finance mortgages.(6)
    
    The amount of available capacity consists of $4,767.3 million of committed capacity and
$150.0 million of uncommitted capacity as of December 31, 2005. Although the Company believes
that the uncommitted capacity is currently available, there can be no assurance that the
lender under this facility would elect to make advances if and when requested to do so.
 CTX Mortgage Company, LLC and Harwood Street Funding I, LLC
  14




---



##### Table of Contents



Centex Home Equity Company, LLC and Harwood Street Funding II, LLC
   15




---



##### Table of Contents



(H) COMMITMENTS AND CONTINGENCIES
     16




---



##### Table of Contents



December
31, 2005
    
    

March
31, 2005Balance at Beginning of Period
    
    $
    34,961
    
    
    $
    16,683Warranties Issued
    
    
    37,197
    
    
    
    42,591Settlements Made
    
    
    (29,350
    )
    
    
    (31,070
    )Changes in Liability of Pre-Existing
Warranties, Including Expirations
    
    
    
    
    
    
    6,757Balance at End of Period
    
    $
    42,808
    
    
    $
    34,961
  December
31, 2005
    
    

March
31, 2005Balance at Beginning of Period
    
    $
    18,803
    
    
    $
    25,045Provision for Losses
    
    
    1,996
    
    
    
    557Settlements
    
    
    (2,359
    )
    
    
    (6,799
    )Balance at End of Period
    
    $
    18,440
    
    
    $
    18,803
    17




---



##### Table of Contents



(I) LAND HELD UNDER OPTION AGREEMENTS NOT OWNED AND OTHER LAND DEPOSITS
   December
31, 2005
    
    

March
31, 2005Cash Deposits included in:Land Held for Development and Sale
    
    $
    244.7
    
    
    $
    141.9Land Held Under Option Agreements Not Owned
    
    
    55.3
    
    
    
    41.5Total Cash Deposits in Inventory
    
    
    300.0
    
    
    
    183.4Letters of Credit
    
    
    25.9
    
    
    
    40.4Total Invested through Deposits or Secured with Letters of Credit
    
    $
    325.9
    
    
    $
    223.8Total Purchase Price of Land Option Agreements
    
    $
    9,522.2
    
    
    $
    7,340.5
 (J) COMPREHENSIVE INCOME
  For the Three Months
    
    
    For the Nine MonthsEnded December 31,
    
    
    Ended December 31,2005
    
    
    2004
    
    
    2005
    
    
    2004Net Earnings
    
    $
    329,344
    
    
    $
    253,771
    
    
    $
    897,544
    
    
    $
    641,616Other Comprehensive Income (Loss), net of Tax:Unrealized Gain (Loss) on Hedging
Instruments
    
    
    (333
    )
    
    
    6,028
    
    
    
    (710
    )
    
    
    11,816Foreign Currency Translation Adjustment
    
    
    4
    
    
    
    21,381
    
    
    
    (14,389
    )
    
    
    17,264Foreign Currency Gain Reclassified to Net
Earnings
    
    
    
    
    
    
    
    
    
    
    (48,354
    )
    
    
    Comprehensive Income
    
    $
    329,015
    
    
    $
    281,180
    
    
    $
    834,091
    
    
    $
    670,696
  18




---



##### Table of Contents



(K) BUSINESS SEGMENTS
  Home Building
   Financial Services
   Construction Services
  19




---



##### Table of Contents



Other
  For the Three Months Ended December 31, 2005(Dollars in millions)Home
    
    Financial
    
    Construction
    
    
    
    
    
    IntersegmentBuilding
    
    Services
    
    Services
    
    Other
    
    Eliminations
    
    TotalRevenues
    
    $
    3,003.6
    
    
    $
    326.1
    
    
    $
    402.9
    
    
    $
    29.1
    
    
    $
    (23.3
    )
    
    $
    3,738.4Cost of Sales
    
    
    (2,126.3
    )
    
    
    (116.1
    )
    
    
    (377.9
    )
    
    
    (14.9
    )
    
    
    22.3
    
    
    
    (2,612.9
    )Selling, General and
Administrative Expenses
    
    
    (421.3
    )
    
    
    (156.1
    )
    
    
    (18.6
    )
    
    
    (45.5
    )
    
    
    
    
    
    
    (641.5
    )Earnings from
Unconsolidated Entities
    
    
    48.9
    
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    49.0Earnings (Loss)
Before Income Tax
    
    $
    504.9
    
    
    $
    53.9
    
    
    $
    6.5
    
    
    $
    (31.3
    )
    
    $
    (1.0
    )
    
    $
    533.0
 For the Three Months Ended December 31, 2004(Dollars in millions)Home
    
    Financial
    
    ConstructionBuilding
    
    Services
    
    Services
    
    Other
    
    TotalRevenues
    
    $
    2,239.5
    
    
    $
    266.7
    
    
    $
    445.5
    
    
    $
    38.0
    
    
    $
    2,989.7Cost of Sales
    
    
    (1,609.2
    )
    
    
    (72.3
    )
    
    
    (422.6
    )
    
    
    (18.6
    )
    
    
    (2,122.7
    )Selling, General and
Administrative Expenses
    
    
    (326.5
    )
    
    
    (148.4
    )
    
    
    (17.0
    )
    
    
    (41.2
    )
    
    
    (533.1
    )Earnings from
Unconsolidated Entities
    
    
    43.4
    
    
    
    
    
    
    
    0.5
    
    
    
    
    
    
    
    43.9Earnings (Loss)
Before Income Tax
    
    $
    347.2
    
    
    $
    46.0
    
    
    $
    6.4
    
    
    $
    (21.8
    )
    
    $
    377.8
 For the Nine Months Ended December 31, 2005(Dollars in millions)Home
    
    Financial
    
    Construction
    
    
    
    
    
    IntersegmentBuilding
    
    Services
    
    Services
    
    Other
    
    Eliminations
    
    TotalRevenues
    
    $
    8,291.2
    
    
    $
    956.2
    
    
    $
    1,160.9
    
    
    $
    86.8
    
    
    $
    (33.2
    )
    
    $
    10,461.9Cost of Sales
    
    
    (5,873.0
    )
    
    
    (318.2
    )
    
    
    (1,090.9
    )
    
    
    (43.7
    )
    
    
    31.8
    
    
    
    (7,294.0
    )Selling, General and
Administrative Expenses
    
    
    (1,181.0
    )
    
    
    (482.6
    )
    
    
    (57.1
    )
    
    
    (129.6
    )
    
    
    
    
    
    
    (1,850.3
    )Earnings from
Unconsolidated Entities
    
    
    67.3
    
    
    
    
    
    
    
    0.3
    
    
    
    
    
    
    
    
    
    
    
    67.6Earnings (Loss)
Before Income Tax
    
    $
    1,304.5
    
    
    $
    155.4
    
    
    $
    13.2
    
    
    $
    (86.5
    )
    
    $
    (1.4
    )
    
    $
    1,385.2
 20




---



##### Table of Contents



For the Nine Months Ended December 31, 2004(Dollars in millions)Home
    
    Financial
    
    ConstructionBuilding
    
    Services
    
    Services
    
    Other
    
    TotalRevenues
    
    $
    6,270.1
    
    
    $
    817.9
    
    
    $
    1,331.9
    
    
    $
    121.8
    
    
    $
    8,541.7Cost of Sales
    
    
    (4,562.0
    )
    
    
    (202.4
    )
    
    
    (1,269.3
    )
    
    
    (67.1
    )
    
    
    (6,100.8
    )Selling, General and
Administrative Expenses
    
    
    (908.7
    )
    
    
    (458.7
    )
    
    
    (47.8
    )
    
    
    (119.1
    )
    
    
    (1,534.3
    )Earnings from
Unconsolidated Entities
    
    
    54.5
    
    
    
    
    
    
    
    1.6
    
    
    
    
    
    
    
    56.1Earnings (Loss)
Before Income Tax
    
    $
    853.9
    
    
    $
    156.8
    
    
    $
    16.4
    
    
    $
    (64.4
    )
    
    $
    962.7
  For the Three Months
    
    For the Nine MonthsEnded December 31,
    
    Ended December 31,2005
    
    2004
    
    2005
    
    2004Operating Loss from Home Services Operations
    
    $
    (1.6
    )
    
    $
    (0.4
    )
    
    $
    (6.3
    )
    
    $
    (5.1
    )Operating Earnings (Loss) from Investment
Real Estate Operations
    
    
    
    
    
    
    6.7
    
    
    
    (0.5
    )
    
    
    16.4Corporate General and Administrative Expense
    
    
    (26.7
    )
    
    
    (23.1
    )
    
    
    (71.0
    )
    
    
    (61.6
    )Interest Expense
    
    
    (3.0
    )
    
    
    (5.0
    )
    
    
    (8.7
    )
    
    
    (14.1
    )$
    (31.3
    )
    
    $
    (21.8
    )
    
    $
    (86.5
    )
    
    $
    (64.4
    )
 (L) INCOME TAXES
  (M) DERIVATIVES AND HEDGING
  21




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##### Table of Contents



Cash Flow Hedges
  Fixed
    
    
    
    
    
    Accumulated OtherNotional Value
    
    Interest
    
    Termination
    
    Comprehensive(in millions)
    
    Rate
    
    Date
    
    IncomeFinancial ServicesInterest rate
swaps
    
    $
    1,964.0
    
    
    
    3.2
    % (1)
    
    Through August 2008
    
    $
    12,557
 (1)
    
    Weighted average fixed interest rates.
   Fair Value Hedges
  Other Derivatives
    22




---



##### Table of Contents



(N) RECENT ACCOUNTING PRONOUNCEMENTS
     (O) OFF-BALANCE SHEET OBLIGATIONS
  (P) DISCONTINUED OPERATIONS
  23




---



##### Table of Contents



For the Three Months
    
    For the Nine MonthsEnded December 31,
    
    Ended December 31,2005
    
    2004
    
    2005
    
    2004Revenues
    
    $
    
    
    
    $
    128.9
    
    
    $
    224.4
    
    
    $
    327.8Operating Earnings
    
    
    
    
    
    
    16.1
    
    
    
    15.2
    
    
    
    35.6Pre-tax Gain on Sale
    
    
    (4.2
    )
    
    
    
    
    
    
    6.5
    
    
    
    
  (Q) SUBSEQUENT EVENTS
  (R) RECLASSIFICATIONS
  24




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Executive Summary
  Revenues
 
 Earnings
(Loss) from Continuing Operations BeforeIncome Taxes
 
 *
    
    Other consists of the financial results of our investment real estate and
home services operations, as well as corporate general and administrative
expense, interest expense and intersegment eliminations.
   25




---



##### Table of Contents



Revenues
 
 Earnings
(Loss) from Continuing OperationsBefore Income Taxes
 
 *
    
    Other consists of the financial results of our investment real estate and
home services operations, as well as corporate general and administrative
expense, interest expense and intersegment eliminations.
    26




---



##### Table of Contents



®
       27




---



##### Table of Contents



HOME BUILDING
    For the Three Months Ended December 31,2005
    
    2004% Change
    
    
    
    
    
    
    % ChangeRevenues  Housing
    
    $
    2,956.3
    
    
    
    36.1
    %
    
    $
    2,172.5
    
    
    
    18.6
    %Revenues  Land Sales and Other
    
    
    47.3
    
    
    
    (29.4
    %)
    
    
    67.0
    
    
    
    (9.3
    %)Cost of Sales  Housing
    
    
    (2,080.7
    )
    
    
    33.8
    %
    
    
    (1,554.8
    )
    
    
    16.0
    %Cost of Sales  Land Sales and Other
    
    
    (45.6
    )
    
    
    (16.2
    %)
    
    
    (54.4
    )
    
    
    (22.3
    %)Selling, General and Administrative Expenses
    
    
    (421.3
    )
    
    
    29.0
    %
    
    
    (326.5
    )
    
    
    22.7
    %Earnings from Unconsolidated Entities
    
    
    48.9
    
    
    
    12.7
    %
    
    
    43.4
    
    
    
    107.7
    %Operating Earnings
    
    $
    504.9
    
    
    
    45.4
    %
    
    $
    347.2
    
    
    
    38.8
    %Operating Earnings as a Percentage of Revenues
    
    
    16.8
    %
    
    NM*
    
    
    15.5
    %
    
    NM
 *NM = Not meaningful
 For the Nine Months Ended December 31,2005
    
    2004% Change
    
    
    
    
    
    
    % ChangeRevenues  Housing
    
    $
    8,030.4
    
    
    
    31.7
    %
    
    $
    6,097.9
    
    
    
    22.0
    %Revenues  Land Sales and Other
    
    
    260.8
    
    
    
    51.5
    %
    
    
    172.2
    
    
    
    40.8
    %Cost of Sales  Housing
    
    
    (5,676.9
    )
    
    
    28.8
    %
    
    
    (4,407.9
    )
    
    
    20.0
    %Cost of Sales  Land Sales and Other
    
    
    (196.1
    )
    
    
    27.3
    %
    
    
    (154.1
    )
    
    
    23.1
    %Selling, General and Administrative Expenses
    
    
    (1,181.0
    )
    
    
    30.0
    %
    
    
    (908.7
    )
    
    
    24.0
    %Earnings from Unconsolidated Entities
    
    
    67.3
    
    
    
    23.5
    %
    
    
    54.5
    
    
    
    132.9
    %Operating Earnings
    
    $
    1,304.5
    
    
    
    52.8
    %
    
    $
    853.9
    
    
    
    39.4
    %Operating Earnings as a Percentage of Revenues
    
    
    15.7
    %
    
    NM
    
    
    13.6
    %
    
    NM
 28




---



##### Table of Contents




    
    Growth in average neighborhoods
    
    Growth in closings per average neighborhood
    
    Increases in average unit sales price
    
    Operating margin improvement
  For the Three Months Ended December 31,2005
    
    2004% Change
    
    
    
    
    
    
    % ChangeUnits Closed
    
    
    9,504
    
    
    
    18.1
    %
    
    
    8,047
    
    
    
    7.8
    %Average Unit Sales Price
    
    $
    311,064
    
    
    
    15.2
    %
    
    $
    269,972
    
    
    
    10.0
    %Operating Earnings Per Unit
    
    $
    53,127
    
    
    
    23.1
    %
    
    $
    43,143
    
    
    
    28.8
    %Average Operating Neighborhoods
    
    
    635
    
    
    
    6.2
    %
    
    
    598
    
    
    
    6.8
    %Closings Per Average Neighborhood
    
    
    15.0
    
    
    
    11.1
    %
    
    
    13.5
    
    
    
    1.5
    %
 For the Nine Months Ended December 31,2005
    
    2004% Change
    
    
    
    
    
    
    % ChangeUnits Closed
    
    
    26,896
    
    
    
    15.6
    %
    
    
    23,261
    
    
    
    12.2
    %Average Unit Sales Price
    
    $
    298,571
    
    
    
    13.9
    %
    
    $
    262,150
    
    
    
    8.7
    %Operating Earnings Per Unit
    
    $
    48,500
    
    
    
    32.1
    %
    
    $
    36,711
    
    
    
    24.2
    %Average Operating Neighborhoods
    
    
    618
    
    
    
    6.4
    %
    
    
    581
    
    
    
    4.1
    %Closings Per Average Neighborhood
    
    
    43.5
    
    
    
    8.8
    %
    
    
    40.0
    
    
    
    7.8
    %
 As of December 31,2005
    
    2004% Change
    
    
    
    
    
    
    % ChangeBacklog Units
    
    
    19,795
    
    
    
    13.1
    %
    
    
    17,501
    
    
    
    18.5
    %Lots Owned
    
    
    106,595
    
    
    
    13.5
    %
    
    
    93,919
    
    
    
    30.8
    %Lots Controlled
    
    
    187,126
    
    
    
    14.1
    %
    
    
    164,002
    
    
    
    62.6
    %Total Lots Owned and Controlled
    
    
    293,721
    
    
    
    13.9
    %
    
    
    257,921
    
    
    
    49.4
    %
    29




---



##### Table of Contents



30




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##### Table of Contents



International
  FINANCIAL SERVICES
   For the Three Months Ended December 31,2005
    
    2004% Change
    
    
    
    
    
    
    % ChangeRevenues
    
    $
    326.1
    
    
    
    22.3
    %
    
    $
    266.7
    
    
    
    12.0
    %Cost of Sales  Interest Expense
    
    
    (116.1
    )
    
    
    60.6
    %
    
    
    (72.3
    )
    
    
    25.3
    %Selling, General and
Administrative Expenses
    
    
    (156.1
    )
    
    
    5.2
    %
    
    
    (148.4
    )
    
    
    8.5
    %Operating Earnings
    
    $
    53.9
    
    
    
    17.2
    %
    
    $
    46.0
    
    
    
    5.3
    %Interest Margin
    
    $
    83.2
    
    
    
    (5.5
    %)
    
    $
    88.0
    
    
    
    12.7
    %Origination Volume
    
    $
    5,491.4
    
    
    
    23.9
    %
    
    $
    4,432.2
    
    
    
    13.9
    %Number of Loans Originated
    
    
    29,222
    
    
    
    9.6
    %
    
    
    26,653
    
    
    
    2.6
    %
 For the Nine Months Ended December 31,2005
    
    2004% Change
    
    
    
    
    
    
    % ChangeRevenues
    
    $
    956.2
    
    
    
    16.9
    %
    
    $
    817.9
    
    
    
    2.8
    %Cost of Sales  Interest Expense
    
    
    (318.2
    )
    
    
    57.2
    %
    
    
    (202.4
    )
    
    
    21.4
    %Selling, General and
Administrative Expenses
    
    
    (482.6
    )
    
    
    5.2
    %
    
    
    (458.7
    )
    
    
    3.5
    %Operating Earnings
    
    $
    155.4
    
    
    
    (0.9
    %)
    
    $
    156.8
    
    
    
    (15.6
    %)Interest Margin
    
    $
    255.3
    
    
    
    (8.0
    %)
    
    $
    277.4
    
    
    
    28.7
    %Origination Volume
    
    $
    16,626.8
    
    
    
    21.2
    %
    
    $
    13,723.5
    
    
    
    (7.2
    %)Number of Loans Originated
    
    
    89,941
    
    
    
    6.2
    %
    
    
    84,720
    
    
    
    (13.6
    %)
  31




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##### Table of Contents



Prime Mortgage Lending
  For the Three Months Ended December 31,2005
    
    2004% Change
    
    
    
    
    
    % ChangeRevenues
    
    $
    112.9
    
    
    
    11.5
    %
    
    $
    101.3
    
    
    
    (2.8
    %)Cost of Sales  Interest Expense
    
    
    (17.3
    )
    
    
    108.4
    %
    
    
    (8.3
    )
    
    
    36.1
    %Selling, General and Administrative
Expenses
    
    
    (74.6
    )
    
    
    3.5
    %
    
    
    (72.1
    )
    
    
    1.3
    %Operating Earnings
    
    $
    21.0
    
    
    
    0.5
    %
    
    $
    20.9
    
    
    
    (22.3
    %)Operating Margin
    
    
    18.6
    %
    
    NM
    
    
    20.6
    %
    
    NMInterest Margin
    
    $
    9.0
    
    
    
    (18.9
    %)
    
    $
    11.1
    
    
    
    (8.3
    %)Average Interest Earning Assets
    
    $
    1,533.4
    
    
    
    17.7
    %
    
    $
    1,302.8
    
    
    
    (10.4
    %)Average Yield
    
    
    6.85
    %
    
    NM
    
    
    5.94
    %
    
    NMAverage Interest Bearing
Liabilities
    
    $
    1,526.6
    
    
    
    18.6
    %
    
    $
    1,287.3
    
    
    
    (4.2
    %)Average Rate Paid
    
    
    4.52
    %
    
    NM
    
    
    2.56
    %
    
    NM
 For the Nine Months Ended December 31,2005
    
    2004% Change
    
    
    
    
    
    % ChangeRevenues
    
    $
    343.8
    
    
    
    9.0
    %
    
    $
    315.5
    
    
    
    (23.6
    %)Cost of Sales  Interest Expense
    
    
    (47.9
    )
    
    
    106.5
    %
    
    
    (23.2
    )
    
    
    34.1
    %Selling, General and
Administrative
Expenses
    
    
    (232.9
    )
    
    
    7.0
    %
    
    
    (217.6
    )
    
    
    (15.2
    %)Operating Earnings
    
    $
    63.0
    
    
    
    (15.7
    %)
    
    $
    74.7
    
    
    
    (46.2
    %)Operating Margin
    
    
    18.3
    %
    
    NM
    
    
    23.7
    %
    
    NMInterest Margin
    
    $
    29.3
    
    
    
    (27.3
    %)
    
    $
    40.3
    
    
    
    12.9
    %Average Interest Earning Assets
    
    $
    1,599.5
    
    
    
    9.4
    %
    
    $
    1,462.3
    
    
    
    8.5
    %Average Yield
    
    
    6.43
    %
    
    NM
    
    
    5.79
    %
    
    NMAverage Interest Bearing
Liabilities
    
    $
    1,611.5
    
    
    
    13.4
    %
    
    $
    1,421.0
    
    
    
    12.9
    %Average Rate Paid
    
    
    3.97
    %
    
    NM
    
    
    2.15
    %
    
    NM
   32




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##### Table of Contents



For the Three Months Ended December 31,2005
    
    2004% Change
    
    
    
    
    
    % ChangeLoan Sales to Investors
    
    $
    3,099.1
    
    
    
    47.3
    %
    
    $
    2,104.4
    
    
    
    (40.7
    %)Gain on Sale of Mortgage Loans
    
    $
    40.6
    
    
    
    13.4
    %
    
    $
    35.8
    
    
    
    (17.5
    %)
 For the Nine Months Ended December 31,2005
    
    2004% Change
    
    
    
    
    
    % ChangeLoan Sales to Investors
    
    $
    9,203.5
    
    
    
    28.4
    %
    
    $
    7,165.4
    
    
    
    (45.4
    %)Gain on Sale of Mortgage Loans
    
    $
    126.0
    
    
    
    17.6
    %
    
    $
    107.1
    
    
    
    (46.4
    %)
  33




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##### Table of Contents



For the Three Months Ended December 31,2005
    
    2004% Change
    
    
    
    
    
    % ChangeOrigination Volume (in millions)
    
    $
    3,737.4
    
    
    
    22.0
    %
    
    $
    3,064.1
    
    
    
    6.2
    %Number of Loans OriginatedBuilder
    
    
    6,616
    
    
    
    21.1
    %
    
    
    5,463
    
    
    
    6.3
    %Retail
    
    
    9,813
    
    
    
    (0.8
    %)
    
    
    9,897
    
    
    
    (15.1
    %)16,429
    
    
    
    7.0
    %
    
    
    15,360
    
    
    
    (8.5
    %)Number of Loan ApplicationsBuilder
    
    
    5,908
    
    
    
    8.1
    %
    
    
    5,463
    
    
    
    15.6
    %Retail
    
    
    7,728
    
    
    
    (10.2
    %)
    
    
    8,603
    
    
    
    (3.9
    %)13,636
    
    
    
    (3.1
    %)
    
    
    14,066
    
    
    
    2.8
    %Average Loan Size
    
    $
    227,500
    
    
    
    14.0
    %
    
    $
    199,500
    
    
    
    16.1
    %
 For the Nine Months Ended December 31,2005
    
    2004% Change
    
    
    
    
    
    % ChangeOrigination Volume (in millions)
    
    $
    11,836.9
    
    
    
    22.6
    %
    
    $
    9,656.1
    
    
    
    (18.7
    %)Number of Loans OriginatedBuilder
    
    
    18,480
    
    
    
    17.8
    %
    
    
    15,688
    
    
    
    9.7
    %Retail
    
    
    35,028
    
    
    
    (1.1
    %)
    
    
    35,400
    
    
    
    (36.8
    %)53,508
    
    
    
    4.7
    %
    
    
    51,088
    
    
    
    (27.4
    %)Number of Loan ApplicationsBuilder
    
    
    20,372
    
    
    
    17.6
    %
    
    
    17,330
    
    
    
    2.3
    %Retail
    
    
    29,975
    
    
    
    1.9
    %
    
    
    29,427
    
    
    
    (41.7
    %)50,347
    
    
    
    7.7
    %
    
    
    46,757
    
    
    
    (30.6
    %)Average Loan Size
    
    $
    221,200
    
    
    
    17.0
    %
    
    $
    189,000
    
    
    
    11.9
    %
   34




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##### Table of Contents



Sub-Prime Home Equity Lending
  For the Three Months Ended December 31,2005
    
    2004% Change
    
    
    
    
    
    % ChangeRevenues
    
    $
    214.9
    
    
    
    29.9
    %
    
    $
    165.4
    
    
    
    23.4
    %Cost of Sales  Interest Expense
    
    
    (98.8
    )
    
    
    54.4
    %
    
    
    (64.0
    )
    
    
    24.0
    %Selling, General and Administrative
Expenses:Operating Expenses
    
    
    (62.8
    )
    
    
    13.2
    %
    
    
    (55.5
    )
    
    
    26.4
    %Loan Loss Provision
    
    
    (19.0
    )
    
    
    (8.7
    %)
    
    
    (20.8
    )
    
    
    (4.1
    %)Operating Earnings
    
    $
    34.3
    
    
    
    36.7
    %
    
    $
    25.1
    
    
    
    49.4
    %Interest Margin
    
    $
    74.2
    
    
    
    (3.5
    %)
    
    $
    76.9
    
    
    
    16.5
    %Average Interest Earning Assets
    
    $
    8,574.4
    
    
    
    14.8
    %
    
    $
    7,468.3
    
    
    
    27.5
    %Average Yield
    
    
    8.07
    %
    
    NM
    
    
    7.55
    %
    
    NMAverage Interest Bearing Liabilities
    
    $
    8,765.6
    
    
    
    13.8
    %
    
    $
    7,703.8
    
    
    
    26.1
    %Average Rate Paid
    
    
    4.51
    %
    
    NM
    
    
    3.32
    %
    
    NM
 For the Nine Months Ended December 31,2005
    
    2004% Change
    
    
    
    
    
    % ChangeRevenues
    
    $
    617.4
    
    
    
    22.9
    %
    
    $
    502.4
    
    
    
    31.3
    %Cost of Sales  Interest Expense
    
    
    (270.3
    )
    
    
    50.8
    %
    
    
    (179.2
    )
    
    
    19.9
    %Selling, General and Administrative
Expenses:Operating Expenses
    
    
    (183.1
    )
    
    
    8.2
    %
    
    
    (169.2
    )
    
    
    30.4
    %Loan Loss Provision
    
    
    (68.0
    )
    
    
    (5.4
    %)
    
    
    (71.9
    )
    
    
    27.0
    %Operating Earnings
    
    $
    96.0
    
    
    
    16.9
    %
    
    $
    82.1
    
    
    
    75.1
    %Interest Margin
    
    $
    226.0
    
    
    
    (4.7
    %)
    
    $
    237.1
    
    
    
    31.8
    %Average Interest Earning Assets
    
    $
    8,393.9
    
    
    
    18.0
    %
    
    $
    7,111.8
    
    
    
    32.5
    %Average Yield
    
    
    7.88
    %
    
    NM
    
    
    7.81
    %
    
    NMAverage Interest Bearing Liabilities
    
    $
    8,600.8
    
    
    
    17.1
    %
    
    $
    7,347.0
    
    
    
    31.3
    %Average Rate Paid
    
    
    4.19
    %
    
    NM
    
    
    3.25
    %
    
    NM
  35




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##### Table of Contents



For the Three Months Ended December 31,2005
    
    2004% Change
    
    
    
    
    
    % ChangeOrigination Volume (in millions)
    
    $
    1,754.0
    
    
    
    28.2
    %
    
    $
    1,368.1
    
    
    
    36.2
    %Number of Loans Originated
    
    
    12,793
    
    
    
    13.3
    %
    
    
    11,293
    
    
    
    23.0
    %Number of Loan Applications
    
    
    112,976
    
    
    
    12.4
    %
    
    
    100,509
    
    
    
    20.3
    %Average Loan Size
    
    $
    137,100
    
    
    
    13.2
    %
    
    $
    121,100
    
    
    
    10.7
    %
 For the Nine Months Ended December 31,2005
    
    2004% Change
    
    
    
    
    
    % ChangeOrigination Volume (in millions)
    
    $
    4,789.9
    
    
    
    17.8
    %
    
    $
    4,067.4
    
    
    
    39.9
    %Number of Loans Originated
    
    
    36,433
    
    
    
    8.3
    %
    
    
    33,632
    
    
    
    21.1
    %Number of Loan Applications
    
    
    329,173
    
    
    
    10.5
    %
    
    
    297,807
    
    
    
    19.2
    %Average Loan Size
    
    $
    131,500
    
    
    
    8.8
    %
    
    $
    120,900
    
    
    
    15.5
    %
 36




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##### Table of Contents



For the Nine Months Ended December 31,2005
    
    2004% Change
    
    
    
    
    
    % ChangeServicing Portfolio:Number of LoansPortfolio Accounting Method
    
    
    86,780
    
    
    
    5.0
    %
    
    
    82,628
    
    
    
    12.8
    %Serviced for Others
    
    
    19,357
    
    
    
    30.8
    %
    
    
    14,794
    
    
    
    30.0
    %Total
    
    
    106,137
    
    
    
    8.9
    %
    
    
    97,422
    
    
    
    15.1
    %Dollars in billionsPortfolio Accounting Method
    
    $
    8.76
    
    
    
    13.5
    %
    
    $
    7.72
    
    
    
    27.0
    %Serviced for Others
    
    
    1.92
    
    
    
    65.5
    %
    
    
    1.16
    
    
    
    73.1
    %Total
    
    $
    10.68
    
    
    
    20.3
    %
    
    $
    8.88
    
    
    
    31.6
    %
      37




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##### Table of Contents



CONSTRUCTION SERVICES
  For the Three Months Ended December 31,2005
    
    2004% Change
    
    
    
    
    
    % ChangeRevenues
    
    $
    402.9
    
    
    
    (9.6
    %)
    
    $
    445.5
    
    
    
    10.2
    %Operating Earnings
    
    $
    6.5
    
    
    
    1.6
    %
    
    $
    6.4
    
    
    
    77.8
    %New Contracts Executed
    
    $
    555.1
    
    
    
    (38.0
    %)
    
    $
    895.2
    
    
    
    59.6
    %
 For the Nine Months Ended December 31,2005
    
    2004% Change
    
    
    
    
    
    % ChangeRevenues
    
    $
    1,160.9
    
    
    
    (12.8
    %)
    
    $
    1,331.9
    
    
    
    14.2
    %Operating Earnings
    
    $
    13.2
    
    
    
    (19.5
    %)
    
    $
    16.4
    
    
    
    29.1
    %New Contracts Executed
    
    $
    2,110.3
    
    
    
    32.1
    %
    
    $
    1,597.9
    
    
    
    13.2
    %
 As of December 31,2005
    
    2004% Change
    
    
    
    
    
    % ChangeBacklog of Uncompleted Contracts
    
    $
    2,950.5
    
    
    
    46.6
    %
    
    $
    2,012.4
    
    
    
    14.1
    %
   38




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##### Table of Contents



OTHER
  For the Three Months Ended December 31,2005
    
    2004% Change
    
    
    
    
    
    % ChangeOperating Loss from Home Services Operations
    
    $
    (1.6
    )
    
    
    300.0
    %
    
    $
    (0.4
    )
    
    
    
    %Operating Earnings from Investment
Real Estate Operations
    
    
    
    
    
    
    (100.0
    %)
    
    
    6.7
    
    
    
    52.3
    %Corporate General and Administrative Expense
    
    
    (26.7
    )
    
    
    15.6
    %
    
    
    (23.1
    )
    
    
    (22.7
    %)Interest Expense
    
    
    (3.0
    )
    
    
    (40.0
    %)
    
    
    (5.0
    )
    
    
    42.9
    %Operating Loss
    
    $
    (31.3
    )
    
    
    43.6
    %
    
    $
    (21.8
    )
    
    
    (24.8
    %)
 For the Nine Months Ended December 31,2005
    
    2004% Change
    
    
    
    
    
    % ChangeOperating Loss from Home Services Operations
    
    $
    (6.3
    )
    
    
    23.5
    %
    
    $
    (5.1
    )
    
    
    112.5
    %Operating Earnings (Loss) from Investment
Real Estate Operations
    
    
    (0.5
    )
    
    
    (103.0
    %)
    
    
    16.4
    
    
    
    (45.9
    %)Corporate General and Administrative Expense
    
    
    (71.0
    )
    
    
    15.3
    %
    
    
    (61.6
    )
    
    
    (13.4
    %)Interest Expense
    
    
    (8.7
    )
    
    
    (38.3
    %)
    
    
    (14.1
    )
    
    
    (60.2
    %)Operating Loss
    
    $
    (86.5
    )
    
    
    34.3
    %
    
    $
    (64.4
    )
    
    
    (18.1
    %)
     39




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##### Table of Contents



FINANCIAL CONDITION AND LIQUIDITY
  For the Nine Months Ended December 31,2005
    
    2004Net Cash (Used in) Provided byCentex*Operating Activities
    
    $
    (1,065,887
    )
    
    $
    (932,990
    )Investing Activities
    
    
    70,662
    
    
    
    (37,631
    )Financing Activities
    
    
    572,780
    
    
    
    846,191Effect of Exchange Rate on Cash
    
    
    (1,479
    )
    
    
    977(423,924
    )
    
    
    (123,453
    )Financial ServicesOperating Activities
    
    
    86,943
    
    
    
    197,527Investing Activities
    
    
    (923,907
    )
    
    
    (1,304,192
    )Financing Activities
    
    
    837,202
    
    
    
    1,101,582238
    
    
    
    (5,083
    )Centex Corporation and SubsidiariesOperating Activities
    
    
    (1,068,701
    )
    
    
    (756,461
    )Investing Activities
    
    
    (788,488
    )
    
    
    (1,359,825
    )Financing Activities
    
    
    1,434,982
    
    
    
    1,986,773Effect of Exchange Rate on Cash
    
    
    (1,479
    )
    
    
    977Net Decrease in Cash
    
    $
    (423,686
    )
    
    $
    (128,536
    )
 *
    
    Centex represents a supplemental presentation that reflects the Financial Services segment
as if accounted for under the equity method. We believe that separate disclosure of the
consolidating information is useful because the Financial Services subsidiaries operate in a
distinctly different financial environment that generally requires significantly less equity
to support their higher debt levels compared to the operations of our other subsidiaries; the
Financial Services subsidiaries have structured their financing programs substantially on a
stand alone basis; and Centex has limited obligations with respect to the indebtedness of our
Financial Services subsidiaries. Management uses this information in its financial and
strategic planning. We also use this presentation to allow investors to compare us to
homebuilders that do not have financial services operations.
   40




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##### Table of Contents



Existing Credit
    
    AvailableFacilities
    
    CapacityCentexMulti-Bank Revolving Credit FacilityRevolving Credit
    
    $
    1,000,000
    
    
    $
    610,000Letters of Credit
    
    
    500,000
    
    
    
    139,4751,500,000
    
    
    
    749,475
    (1)(2)Unsecured Credit Facility
    
    
    150,000
    
    
    
    150,000
    (3)1,650,000
    
    
    
    899,475Financial ServicesMortgage Servicer Advance Facility
    
    
    100,000
    
    
    
    17,653
    (4)Secured Credit Facilities
    
    
    990,000
    
    
    
    514,739
    (5)Harwood Street Funding I, LLC Facility
    
    
    3,000,000
    
    
    
    1,622,800Harwood Street Funding II, LLC Facility
    
    
    4,000,000
    
    
    
    1,862,5978,090,000
    
    
    
    4,017,789$
    9,740,000
    
    
    $
    4,917,264
    (6)
 (1)
    
    This is an unsecured, committed, multi-bank revolving credit facility, maturing in July
2010, which serves as backup for Centex Corporations $900 million commercial paper program
and provides $500 million of letter of credit capacity. As of December 31, 2005, the $900
million commercial paper program had $390 million outstanding which has been deducted from the
available capacity under the back-up facility. There have been no direct borrowings under
this revolving credit facility since its inception.(2)
    
    In conjunction with the issuance of surety bonds in support of our Construction Services
activity, Centex Corporation has agreed to provide letters of credit of up to $100 million if
Centex Corporations public debt ratings fall below investment grade. In support of this
ratings trigger, we maintain a minimum of $100 million in unused committed credit at all
times.(3)
    
    Centex Corporation maintains a $150 million unsecured, uncommitted credit facility.(4)
    
    Under this facility, Home Equity is permitted to securitize its mortgage servicer advances in
an amount to $100 million with a final maturity of May 2011. This facility has no recourse to
Centex Corporation.(5)
    
    CTX Mortgage Company, LLC and its related companies and Home Equity share in a $300 million
secured, committed credit facility to finance mortgage inventory. CTX Mortgage Company, LLC
and its related companies also maintain $690 million of secured, committed mortgage warehouse
facilities to finance mortgages.(6)
    
    The amount of available capacity consists of $4,767.3 million of committed capacity and
$150.0 million of uncommitted capacity as of December 31, 2005. Although we believe that the
uncommitted capacity is currently available, there can be no assurance that the lender under
this facility would elect to make advances if and when requested to do so.
   41




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##### Table of Contents



CentexShort-term Debt:Short-term Notes Payable
    
    $
    396,759Senior Debt:Medium-term Note Programs, weighted-average 5.74%, due through 2008
    
    
    373,000Senior Notes, weighted-average 5.79%, due through 2016
    
    
    3,208,708Other Indebtedness, weighted-average 5.54%, due through 2015
    
    
    28,214Subordinated Debt:Subordinated Debentures, 8.75%, due in 2007
    
    
    99,8984,106,579Financial ServicesShort-term Debt:Short-term Notes Payable
    
    
    557,608Harwood Street Funding II, LLC Medium-term Notes
    
    
    200,000Harwood Street Funding I and II, LLC Secured Liquidity Notes
    
    
    3,103,117Home Equity Asset-Backed Certificates, weighted-average 4.95%, due
through 2036
    
    
    6,512,623Harwood Street Funding I, LLC Variable Rate Subordinated Extendable
Certificates, weighted-average 6.39%, due through 2010
    
    
    60,000Harwood Street Funding II, LLC Variable Rate Subordinated Notes,
weighted-average 6.25%, due through 2011
    
    
    150,00010,583,348Total
    
    $
    14,689,927
  Debt Type
    
    AmountCentexIssuances
    
    Senior Notes
    $
    
    950.0Retirements
    
    Senior Note
    
    
    (200.0)Subordinated Debentures
    
    
    (100.0)Medium-term Note
    
    
    (25.0)Other Indebtedness
    
    Various
    
    
    (15.4)Financial ServicesIssuances
    
    Asset-Backed Certificates
    
    
    1,952.2HSF-II Subordinated Note
    
    
    56.3Retirements
    
    Asset-Backed Certificates
    
    
    (2,539.0)Total
    
    
    $
    
    79.1
 42




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##### Table of Contents



CERTAIN OFF-BALANCE SHEET OBLIGATIONS
  Joint Ventures
  CRITICAL ACCOUNTING ESTIMATES
  Impairment of Long-Lived Assets
  Goodwill
  43




---



##### Table of Contents



Inventory Valuation
    Land Held Under Option Agreements Not Owned
     Valuation of Residential Mortgage Loans Held for Investment
   44




---



##### Table of Contents



Mortgage Securitization Residual Interest
  Loan Origination Reserve
   Warranty Accruals
  Insurance Accruals
  45




---



##### Table of Contents



RECENT ACCOUNTING PRONOUNCEMENTS
     
 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
  46




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
   
 Item 4. Controls and Procedures
  
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
   
 Item 1a. Risk Factors
  47




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##### Table of Contents




    
    Changes in regional and national economic conditions, such as job growth, interest
rates and consumer confidence, could decrease demand and pricing for new homes and
adversely affect our profitability;
    
    Increased competitive conditions in the residential markets in which we operate or
related markets could reduce our home deliveries or decrease our profitability;
    
    Slow growth or no growth homebuilding initiatives approved by municipalities could
negatively impact our ability to build or timely build in these areas; and
    
    Compliance with the extensive and complex laws and regulations that affect the land
development and homebuilding process, and other aspects of our business, could have
substantial costs both in terms of time and money.
  
    
    Increases in interest rates are likely to result in a decrease in the volume of
mortgage loan refinancing transactions and can result in decreased interest margins,
which could adversely affect the volume of loan originations and reduce our revenues,
operating margins and earnings;
    
    Although we establish an allowance for credit losses on residential mortgage loans
held for investment, there can be no assurance that such allowance will be sufficient
to cover any losses or judgments;
    
    A significant decline in the ratings of our servicing of residential home mortgages
could adversely affect the profitability of our Home Equity operations; and
    
    Changes in the laws and regulations that affect loan origination or changes in the
way that such laws and regulations are enforced may adversely affect the way that we
operate or our ability to profitably originate loans.
  
    
    Reductions in capital spending trends, changes in federal and state appropriations
for construction projects, decreases in financing and capital availability or increased
competitive pressures on the availability and pricing of construction projects could
result in a reduction in the supply of suitable projects and reduce margins on
construction contracts; and
    
    Changes in the timing and funding of new awards, cancellations or changes in the
scope of existing contracts, the ability to meet performance or schedule guarantees and
cost overruns may adversely affect our operations.
  
    
    Any legislation that restricts the ability of government-sponsored enterprises,
principally FNMA and FHLMC, to package mortgages into investment securities or that
reduces the liquidity of secondary markets could reduce demand for our homes and/or the
loans that we originate;
    
    A significant decline in the credit rating of our senior debt securities, which is
currently investment grade, could adversely affect our ability to generate or obtain
the capital to achieve our growth objectives;
    
    Increases in interest rates may reduce home sales and loan originations;
    
    Natural disasters or adverse weather conditions could delay new home deliveries,
increase costs, reduce the availability of raw materials and skilled labor, cause
delays in construction, negatively impact the demand for new homes in affected areas
and damage homes in affected areas that serve as collateral for mortgage loans that
Home Equity services;
    
    Increased costs or shortages of building materials, labor disputes and shortages of
skilled labor could cause increases in construction costs and construction delays;
    
    Changes in federal or state income tax laws that eliminate or substantially modify
certain real estate related income tax deductions, such as for mortgage interest or
property taxes, could adversely impact the demand for, and/or sales prices of, new
homes, mortgage loans and home equity loans; and
    
    Unusually high levels of warranty and other claims related to construction defects
and other construction-related issues could adversely affect our profitability.
 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
    
    
    PlansPeriodOctober 1-31
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    5,000,000November 1-30
    
    
    4,168,100
    
    
    $
    70.72
    
    
    
    4,168,100
    
    
    
    831,900December 1-31
    
    
    838,539
    
    
    $
    72.99
    
    
    
    831,900
    
    
    
    5,000,000Total
(1)
(2)
    
    
    5,006,639
    
    
    $
    71.10
    
    
    
    5,000,000
 (1)
    
    Of the 5,006,639 shares repurchased for the quarter ended December 31, 2005, 6,639 shares
represent the delivery to the Company by employees or directors of previously issued shares to
satisfy the exercise price of options and/or withholding taxes that arise on the exercise of
options or the vesting of restricted stock. These transactions are authorized under the terms
of the equity plans under which the options or other equity were awarded; however, these
transactions are not considered repurchases pursuant to the Companys share repurchase
program.(2)
    
    Except as provided in Note (1), all share repurchases were effected in accordance with the
safe harbor provisions of Rule 10b-18 of the Securities Exchange Act of 1934.
  
 Item 6. Exhibits
  3.1
    
    Restated Articles of Incorporation of Centex Corporation
(Centex), as amended (incorporated by reference from Exhibit 3.1 to Centexs
Annual Report on Form 10-K for the fiscal year ended March 31, 2004).3.2
    
    Amended and Restated By-Laws of Centex dated October 11, 2005
(incorporated by reference from Exhibit 3.1 to Centexs Current Report on Form
8-K filed on October 12, 2005).4.1
    
    Any instrument with respect to long-term debt, where the
securities authorized thereunder do not exceed 10% of the total assets of Centex
and its subsidiaries, has not been filed; these instruments relate to (a)
long-term senior and subordinated debt of Centex issued pursuant to supplements
to the indentures filed as Exhibits 4.5 and 4.6 to Centexs Annual Report on
Form 10-K for the fiscal year ended March 31, 2005, which supplements have also
been filed with the SEC as exhibits to various Centex registration statements or
to reports incorporated by reference in such registration statements, (b)
long-term debt issued pursuant to pooling and servicing agreements or similar
agreements in connection with certain asset securitizations involving certain
subsidiaries of Centex, which agreements have been filed with the SEC as
exhibits to various registration statements of CHEC Funding, LLC or to reports
incorporated by reference in such registration statements, (c) long-term debt
issued pursuant to indentures or other agreements in connection with certain
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##### Table of Contents



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.
 50




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Signatures
  CENTEX CORPORATIONRegistrantJanuary 31, 2006
    
    /s/ Leldon E. EcholsLeldon E. EcholsExecutive Vice President andChief Financial Officer(principal financial officer)January 31, 2006
    
    /s/ Mark D. KempMark D. KempSenior Vice President-Controller(principal accounting officer)
 51