##### 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 1934For the Quarterly Period Ended June 30, 2005
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Transition Period From          to
 Commission File No. 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 office, including zip code)
(214) 981-5000
(Registrants telephone number)
 ü
 ü




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Centex Corporation and Subsidiaries
 Form 10-Q Table of Contents
 June 30, 2005
  
 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
    
    
    21Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    40Item 4.
    
    Controls and Procedures
    
    
    40PART II  OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    40Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    41Item 6.
    
    Exhibits
    
    
    41Signatures
    
    
    
    
    43Form of Deferred Compensation AgreementComputation of Ratio of Earnings to Fixed ChargesCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 Centex Corporation and Subsidiaries
Statements of Consolidated Earnings
 For the Three Months Ended June 30,2005
    
    
    2004RevenuesHome Building
    
    $
    2,526,043
    
    
    $
    1,998,114Financial Services
    
    
    303,836
    
    
    
    274,321Construction Services
    
    
    366,055
    
    
    
    434,217Other, including Intersegment Eliminations
    
    
    24,690
    
    
    
    59,4213,220,624
    
    
    
    2,766,073Costs and ExpensesHome Building
    
    
    2,187,963
    
    
    
    1,774,773Financial Services
    
    
    256,106
    
    
    
    216,747Construction Services
    
    
    363,443
    
    
    
    430,205Other, including Intersegment Eliminations
    
    
    27,451
    
    
    
    52,079Corporate General and Administrative
    
    
    20,602
    
    
    
    19,585Interest Expense
    
    
    3,374
    
    
    
    5,0252,858,939
    
    
    
    2,498,414Earnings from Unconsolidated Entities
    
    
    12,764
    
    
    
    8,233Earnings Before Income Taxes
    
    
    374,449
    
    
    
    275,892Income Taxes
    
    
    140,779
    
    
    
    98,659Net Earnings
    
    $
    233,670
    
    
    $
    177,233Basic Earnings Per Share
    
    $
    1.82
    
    
    $
    1.43Diluted Earnings Per Share
    
    $
    1.74
    
    
    $
    1.35Average Shares OutstandingBasic
    
    
    128,672,028
    
    
    
    123,573,221Dilutive Securities:Options
    
    
    5,714,864
    
    
    
    7,110,684Other
    
    
    197,550
    
    
    
    242,913Diluted
    
    
    134,584,442
    
    
    
    130,926,818Cash 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, 2005
    
    
    March 31, 2005AssetsCash and Cash Equivalents
    
    $
    62,887
    
    
    $
    502,586Restricted Cash
    
    
    418,948
    
    
    
    377,789Receivables -Residential Mortgage Loans Held for Investment, net
    
    
    8,207,021
    
    
    
    7,914,426Residential Mortgage Loans Held for Sale
    
    
    2,020,800
    
    
    
    1,775,324Construction Contracts
    
    
    312,586
    
    
    
    302,035Trade, including Notes of $36,920 and $57,071
    
    
    447,438
    
    
    
    494,609Inventories -Housing Projects
    
    
    7,411,909
    
    
    
    6,708,859Land Held for Development and Sale
    
    
    380,030
    
    
    
    363,521Land Held Under Option Agreements Not Owned
    
    
    612,624
    
    
    
    456,917Other
    
    
    32,267
    
    
    
    33,439Investments -Joint Ventures and Other
    
    
    184,658
    
    
    
    163,944Unconsolidated Subsidiaries
    
    
    
    
    
    
    Property and Equipment, net
    
    
    162,758
    
    
    
    162,305Other Assets -Deferred Income Taxes
    
    
    301,366
    
    
    
    177,735Goodwill
    
    
    254,161
    
    
    
    253,163Mortgage Securitization Residual Interest
    
    
    67,825
    
    
    
    70,120Deferred Charges and Other, net
    
    
    272,128
    
    
    
    254,307$
    21,149,406
    
    
    $
    20,011,079Liabilities and Stockholders EquityAccounts Payable
    
    $
    723,675
    
    
    $
    711,804Accrued Liabilities
    
    
    1,471,688
    
    
    
    1,592,888Debt -Centex
    
    
    3,586,443
    
    
    
    3,246,963Financial Services
    
    
    10,285,019
    
    
    
    9,721,146Payables to (Receivables from) Affiliates
    
    
    
    
    
    
    Commitments and ContingenciesMinority Interests
    
    
    599,645
    
    
    
    457,521Stockholders Equity -Preferred Stock: Authorized 5,000,000 Shares,
None Issued
    
    
    
    
    
    
    Common Stock: $.25 Par Value;
Authorized 300,000,000
Shares; Outstanding 128,138,730
and 127,729,725 Shares
    
    
    33,598
    
    
    
    33,327Capital in Excess of Par Value
    
    
    451,685
    
    
    
    407,995Unamortized Value of Deferred Compensation
    
    
    (148
    )
    
    
    (197
    )Retained Earnings
    
    
    4,210,840
    
    
    
    3,982,306Treasury Stock, at Cost; 6,254,213
and 5,577,686 Shares
    
    
    (264,776
    )
    
    
    (213,801
    )Accumulated Other Comprehensive Income
    
    
    51,737
    
    
    
    71,127Total Stockholders Equity
    
    
    4,482,936
    
    
    
    4,280,757$
    21,149,406
    
    
    $
    20,011,079
 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, 2005
    
    
    March 31, 2005
    
    
    June 30, 2005
    
    
    March 31, 2005$
    47,225
    
    
    $
    490,308
    
    
    $
    15,662
    
    
    $
    12,27852,463
    
    
    
    53,339
    
    
    
    366,485
    
    
    
    324,450
    
    
    
    
    
    
    
    8,207,021
    
    
    
    7,914,426
    
    
    
    
    
    
    
    2,020,800
    
    
    
    1,775,324312,586
    
    
    
    302,035
    
    
    
    
    
    
    
    250,714
    
    
    
    297,040
    
    
    
    196,724
    
    
    
    197,5697,411,909
    
    
    
    6,708,859
    
    
    
    
    
    
    
    380,030
    
    
    
    363,521
    
    
    
    
    
    
    
    612,624
    
    
    
    456,917
    
    
    
    
    
    
    
    27,450
    
    
    
    27,133
    
    
    
    4,817
    
    
    
    6,306184,658
    
    
    
    163,944
    
    
    
    
    
    
    
    621,715
    
    
    
    572,290
    
    
    
    
    
    
    
    120,032
    
    
    
    119,070
    
    
    
    42,726
    
    
    
    43,235178,752
    
    
    
    158,663
    
    
    
    122,614
    
    
    
    19,072242,424
    
    
    
    241,426
    
    
    
    11,737
    
    
    
    11,737
    
    
    
    
    
    
    
    67,825
    
    
    
    70,120202,385
    
    
    
    174,948
    
    
    
    69,743
    
    
    
    79,359$
    10,644,967
    
    
    $
    10,129,493
    
    
    $
    11,126,154
    
    
    $
    10,453,876$
    699,583
    
    
    $
    690,628
    
    
    $
    24,092
    
    
    $
    21,1761,278,006
    
    
    
    1,454,986
    
    
    
    193,682
    
    
    
    137,9023,586,443
    
    
    
    3,246,963
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,285,019
    
    
    
    9,721,146
    
    
    
    
    
    
    
    5,560
    
    
    
    (44,958
    )597,999
    
    
    
    456,159
    
    
    
    1,646
    
    
    
    1,362
    
    
    
    
    
    
    
    
    
    
    
    33,598
    
    
    
    33,327
    
    
    
    1
    
    
    
    1451,685
    
    
    
    407,995
    
    
    
    275,467
    
    
    
    275,467(148
    )
    
    
    (197
    )
    
    
    
    
    
    
    4,210,840
    
    
    
    3,982,306
    
    
    
    337,926
    
    
    
    333,568(264,776
    )
    
    
    (213,801
    )
    
    
    
    
    
    
    51,737
    
    
    
    71,127
    
    
    
    2,761
    
    
    
    8,2124,482,936
    
    
    
    4,280,757
    
    
    
    616,155
    
    
    
    617,248$
    10,644,967
    
    
    $
    10,129,493
    
    
    $
    11,126,154
    
    
    $
    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.
 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 30,2005
    
    
    2004Cash
Flows  Operating ActivitiesNet Earnings
    
    $
    233,670
    
    
    $
    177,233Adjustments-Depreciation and Amortization
    
    
    16,491
    
    
    
    11,929Stock-based Compensation
    
    
    17,677
    
    
    
    11,981Provision for Losses on Residential Mortgage Loans
Held for Investment
    
    
    25,340
    
    
    
    26,813Deferred Income Tax Benefit
    
    
    (120,214
    )
    
    
    (10,199
    )Equity in Earnings of Joint Ventures
    
    
    (11,571
    )
    
    
    (5,088
    )Undistributed Earnings of Unconsolidated Subsidiaries
    
    
    
    
    
    
    Minority Interest, net of Taxes
    
    
    (467
    )
    
    
    946Changes in Assets and Liabilities, Excluding Effect of Acquisitions(Increase) Decrease in Restricted Cash
    
    
    (41,159
    )
    
    
    (50,192
    )Decrease (Increase) in Receivables
    
    
    16,338
    
    
    
    (15,765
    )Increase in Residential Mortgage Loans Held for Sale
    
    
    (245,476
    )
    
    
    (26,385
    )Increase in Housing Projects and Land Held for Development and
Sale
    
    
    (756,452
    )
    
    
    (567,889
    )Decrease (Increase) in Other Inventories
    
    
    1,050
    
    
    
    39,826(Decrease) Increase in Accounts Payable and Accrued Liabilities
    
    
    (93,433
    )
    
    
    (73,147
    )(Increase) Decrease in Other Assets, net
    
    
    (22,006
    )
    
    
    31,154Increase (Decrease) in Payables to Affiliates
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    (3,231
    )(980,212
    )
    
    
    (452,014
    )Cash
Flows  Investing ActivitiesPayment on Notes Receivable, net
    
    
    20,151
    
    
    
    5,226Increase in Residential Mortgage Loans Held for Investment
    
    
    (317,935
    )
    
    
    (449,707
    )Increase in Investment and Advances to Joint Ventures
    
    
    (10,550
    )
    
    
    (39,990
    )(Increase) Decrease in Investment and Advances to Unconsolidated
Subsidiaries
    
    
    
    
    
    
    Purchases of Property and Equipment, net
    
    
    (14,892
    )
    
    
    (13,707
    )Other
    
    
    (1,387
    )
    
    
    8,742(324,613
    )
    
    
    (489,436
    )Cash
Flows  Financing ActivitiesIncrease in Short-term Debt, net
    
    
    420,831
    
    
    
    219,736CentexIssuance of Long-term Debt
    
    
    464,512
    
    
    
    391,654Repayment of Long-term Debt
    
    
    (300,573
    )
    
    
    (769
    )Financial ServicesIssuance of Long-term Debt
    
    
    1,055,206
    
    
    
    907,799Repayment of Long-term Debt
    
    
    (731,467
    )
    
    
    (608,867
    )Proceeds from Stock Option Exercises
    
    
    13,202
    
    
    
    9,164Treasury Stock Transactions, net
    
    
    (50,975
    )
    
    
    49Dividends Paid
    
    
    (5,136
    )
    
    
    (4,929
    )865,600
    
    
    
    913,837Effect of Exchange Rate on Cash
    
    
    (474
    )
    
    
    541Net (Decrease) Increase in Cash and Cash Equivalents
    
    
    (439,699
    )
    
    
    (27,072
    )Cash and Cash Equivalents at Beginning of Period
    
    
    502,586
    
    
    
    178,859Cash and Cash Equivalents at End of Period
    
    $
    62,887
    
    
    $
    151,787
 See Notes to Consolidated Financial Statements.
 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 30,2005
    
    
    2004
    
    
    2005
    
    
    2004$
    233,670
    
    
    $
    177,233
    
    
    $
    29,358
    
    
    $
    36,04112,018
    
    
    
    7,540
    
    
    
    4,473
    
    
    
    4,38917,677
    
    
    
    11,981
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,340
    
    
    
    26,813(19,387
    )
    
    
    (72
    )
    
    
    (100,827
    )
    
    
    (10,127
    )(11,571
    )
    
    
    (5,088
    )
    
    
    
    
    
    
    (4,358
    )
    
    
    (36,041
    )
    
    
    
    
    
    
    (751
    )
    
    
    900
    
    
    
    284
    
    
    
    46876
    
    
    
    (1,376
    )
    
    
    (42,035
    )
    
    
    (48,816
    )15,525
    
    
    
    (8,268
    )
    
    
    813
    
    
    
    (7,497
    )
    
    
    
    
    
    
    
    (245,476
    )
    
    
    (26,385
    )(756,452
    )
    
    
    (567,889
    )
    
    
    
    
    
    
    (439
    )
    
    
    39,082
    
    
    
    1,489
    
    
    
    744(152,129
    )
    
    
    (36,190
    )
    
    
    53,245
    
    
    
    (22,689
    )(31,202
    )
    
    
    19,689
    
    
    
    9,196
    
    
    
    11,465
    
    
    
    
    
    
    
    50,518
    
    
    
    (31,809
    )
    
    
    
    
    
    
    
    
    
    
    
    (3,231
    )(696,523
    )
    
    
    (398,499
    )
    
    
    (213,622
    )
    
    
    (71,056
    )20,119
    
    
    
    5,219
    
    
    
    32
    
    
    
    7
    
    
    
    
    
    
    
    (317,935
    )
    
    
    (449,707
    )(10,550
    )
    
    
    (39,990
    )
    
    
    
    
    
    
    (45,067
    )
    
    
    17,541
    
    
    
    
    
    
    
    (10,928
    )
    
    
    (2,602
    )
    
    
    (3,964
    )
    
    
    (11,105
    )(1,387
    )
    
    
    (525
    )
    
    
    
    
    
    
    9,267(47,813
    )
    
    
    (20,357
    )
    
    
    (321,867
    )
    
    
    (451,538
    )180,697
    
    
    
    
    
    
    
    240,134
    
    
    
    219,736464,512
    
    
    
    391,654
    
    
    
    
    
    
    
    (300,573
    )
    
    
    (769
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,055,206
    
    
    
    907,799
    
    
    
    
    
    
    
    (731,467
    )
    
    
    (608,867
    )13,202
    
    
    
    9,164
    
    
    
    
    
    
    
    (50,975
    )
    
    
    49
    
    
    
    
    
    
    
    (5,136
    )
    
    
    (4,929
    )
    
    
    (25,000
    )
    
    
    301,727
    
    
    
    395,169
    
    
    
    538,873
    
    
    
    518,668(474
    )
    
    
    541
    
    
    
    
    
    
    
    (443,083
    )
    
    
    (23,146
    )
    
    
    3,384
    
    
    
    (3,926
    )490,308
    
    
    
    160,590
    
    
    
    12,278
    
    
    
    18,269$
    47,225
    
    
    $
    137,444
    
    
    $
    15,662
    
    
    $
    14,343
 *
    
    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, 2005
 (A) BASIS OF PRESENTATION
   (B) STATEMENTS
OF CONSOLIDATED CASH FLOWS  SUPPLEMENTAL DISCLOSURES
  For the Three MonthsEnded June 30,2005
    
    
    2004Cash Paid for Interest
    
    $
    141,480
    
    
    $
    91,193Net Cash Paid for Taxes
    
    $
    176,735
    
    
    $
    8,617
  For the Three MonthsEnded June 30,2005
    
    
    2004Total Interest Incurred
    
    $
    149,134
    
    
    $
    107,755Less  Interest Capitalized
    
    
    (51,323
    )
    
    
    (41,082
    )Financial Services Interest Expense
    
    
    (94,437
    )
    
    
    (61,648
    )Interest Expense, net
    
    $
    3,374
    
    
    $
    5,025Capitalized Interest Relieved to Home
Buildings Costs and Expenses
    
    $
    36,097
    
    
    $
    27,569
 6




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##### Table of Contents



(C) STOCK-BASED COMPENSATION ARRANGEMENTS
     (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
    
    
    236
    
    
    
    59
    
    
    
    (59
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock Compensation
    
    
    
    
    
    
    
    
    
    
    17,628
    
    
    
    49
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,677Exercise of Stock
Options, Including
Tax Benefits
    
    
    849
    
    
    
    212
    
    
    
    29,840
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,052Cash Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,136
    )
    
    
    
    
    
    
    
    
    
    
    (5,136
    )Purchase of Common
Stock for Treasury
    
    
    (764
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (52,276
    )
    
    
    
    
    
    
    (52,276
    )Other StockTransactions
    
    
    89
    
    
    
    
    
    
    
    (3,719
    )
    
    
    
    
    
    
    
    
    
    
    1,301
    
    
    
    
    
    
    
    (2,418
    )Net Earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    233,670
    
    
    
    
    
    
    
    
    
    
    
    233,670Unrealized Loss
on Hedging
Instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,707
    )
    
    
    (5,707
    )Foreign CurrencyTranslationAdjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,683
    )
    
    
    (13,683
    )Balance, June 30, 2005
    
    
    128,139
    
    
    $
    33,598
    
    
    $
    451,685
    
    
    $
    (148
    )
    
    $
    4,210,840
    
    
    $
    (264,776
    )
    
    $
    51,737
    
    
    $
    4,482,936
 7




---



##### Table of Contents



(E) RESIDENTIAL MORTGAGE LOANS HELD FOR INVESTMENT
  June 30, 2005
    
    
    March 31, 2005Residential Mortgage Loans Held for Investment
    
    $
    8,294,841
    
    
    $
    7,999,728Allowance for Losses on Residential Mortgage Loans
Held for Investment
    
    
    (87,820
    )
    
    
    (85,302
    )Residential Mortgage Loans Held for Investment,
net of Allowance for Losses
    
    $
    8,207,021
    
    
    $
    7,914,426
  For the Three
    
    
    For theMonths Ended
    
    
    Year EndedJune 30, 2005
    
    
    March 31, 2005Balance at Beginning of Period
    
    $
    85,302
    
    
    $
    56,358Provision for Losses
    
    
    25,340
    
    
    
    98,801Losses Sustained, net of Recoveries of
$392 and $1,226
    
    
    (22,822
    )
    
    
    (69,857
    )Balance at End of Period
    
    $
    87,820
    
    
    $
    85,302
  For the Three
    
    
    For theMonths Ended
    
    
    Year EndedJune 30, 2005
    
    
    March 31, 2005Allowance as a Percentage of Gross Loans
Held for Investment
    
    
    1.1
    %
    
    
    1.1
    %Allowance as a Percentage of 90+ Days
Contractual Delinquency
    
    
    46.6
    %
    
    
    44.2
    %90+ Days Contractual Delinquency
(based on months)Total Dollars Delinquent
    
    $
    188,428
    
    
    $
    192,835% Delinquent
    
    
    2.3
    %
    
    
    2.4
    %
  (F) GOODWILL
  Home
    
    
    Financial
    
    
    ConstructionBuilding
    
    
    Services
    
    
    Services
    
    
    Other
    
    
    TotalBalance as of March 31, 2005
    
    $
    158,127
    
    
    $
    11,737
    
    
    $
    1,007
    
    
    $
    82,292
    
    
    $
    253,163Goodwill Acquired
    
    
    124
    
    
    
    
    
    
    
    
    
    
    
    874
    
    
    
    998Balance as of June 30, 2005
    
    $
    158,251
    
    
    $
    11,737
    
    
    $
    1,007
    
    
    $
    83,166
    
    
    $
    254,161
  8




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##### Table of Contents



(G) INDEBTEDNESS
  June 30,
    
    
    March 31,2005
    
    
    2005Weighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    AverageInterest
    
    
    
    
    
    
    InterestRate
    
    
    
    
    
    
    RateShort-term Debt:Centex
    
    $
    188,567
    
    
    
    3.35
    %
    
    $
    7,870
    
    
    
    1.72
    %Financial ServicesFinancial Institutions
    
    
    295,163
    
    
    
    3.67
    %
    
    
    190,779
    
    
    
    3.12
    %Medium-term Notes:Harwood Street Funding I, LLC
    
    
    250,000
    
    
    
    3.24
    %
    
    
    250,000
    
    
    
    2.90
    %Harwood Street Funding II, LLC
    
    
    200,000
    
    
    
    3.39
    %
    
    
    
    
    
    
    
    %Secured Liquidity Notes:Harwood Street Funding I, LLC
    
    
    1,343,146
    
    
    
    3.35
    %
    
    
    1,195,076
    
    
    
    2.89
    %Harwood Street Funding II, LLC
    
    
    619,701
    
    
    
    3.36
    %
    
    
    832,021
    
    
    
    2.99
    %Consolidated Short-term Debt
    
    
    2,896,577
    
    
    
    
    
    
    
    2,475,746Long-term Debt:CentexMedium-term Note Programs, due through 2008
    
    
    398,000
    
    
    
    4.59
    %
    
    
    398,000
    
    
    
    4.59
    %Senior Notes, due through 2016
    
    
    2,708,601
    
    
    
    5.89
    %
    
    
    2,458,547
    
    
    
    6.32
    %Other Indebtedness, due through 2015
    
    
    191,418
    
    
    
    5.40
    %
    
    
    182,716
    
    
    
    5.53
    %Subordinated Debt:Subordinated Debentures, due in 2007
    
    
    99,857
    
    
    
    8.75
    %
    
    
    99,838
    
    
    
    8.75
    %Subordinated Debentures, due in 2006
    
    
    
    
    
    
    
    %
    
    
    99,992
    
    
    
    7.38
    %3,397,876
    
    
    
    
    
    
    
    3,239,093Financial ServicesHome Equity Asset-Backed Certificates,
due through 2036
    
    
    7,367,009
    
    
    
    4.32
    %
    
    
    7,099,520
    
    
    
    3.63
    %Harwood Street Funding I, LLC Variable Rate
Subordinated Extendable Certificates,
due through 2010
    
    
    60,000
    
    
    
    5.34
    %
    
    
    60,000
    
    
    
    4.87
    %Harwood Street Funding II, LLC Variable
Rate Subordinated Notes, due through 2011
    
    
    150,000
    
    
    
    5.20
    %
    
    
    93,750
    
    
    
    5.02
    %7,577,009
    
    
    
    
    
    
    
    7,253,270Consolidated Long-term Debt
    
    
    10,974,885
    
    
    
    
    
    
    
    10,492,363Total Debt
    
    $
    13,871,462
    
    
    
    
    
    
    $
    12,968,109
  9




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##### Table of Contents



For the Three Months Ended June 30,2005
    
    
    2004Short-term Debt:Centex
    
    
    3.13
    %
    
    
    1.15
    %Financial Services
    
    
    3.22
    %
    
    
    1.07
    %Long-term Debt:CentexMedium-term Note Programs(1)
    
    
    5.13
    %
    
    
    5.30
    %Senior Notes
    
    
    6.24
    %
    
    
    6.64
    %Other Indebtedness
    
    
    5.52
    %
    
    
    5.52
    %Subordinated Debentures
    
    
    8.14
    %
    
    
    8.07
    %Financial ServicesCentex Home Equity Company, LLC Long-term Debt(2)
    
    
    4.20
    %
    
    
    3.21
    %CTX Mortgage Company, LLC Long-term Debt(3)
    
    
    5.09
    %
    
    
    3.12
    %
 (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.
  FinancialCentex
    
    
    Services
    
    
    Total2006
    
    $
    41,974
    
    
    $
    2,226,285
    
    
    $
    2,268,2592007
    
    
    292,139
    
    
    
    2,463,378
    
    
    
    2,755,5172008
    
    
    676,672
    
    
    
    1,327,715
    
    
    
    2,004,3872009
    
    
    1,328
    
    
    
    448,194
    
    
    
    449,5222010
    
    
    226,349
    
    
    
    456,391
    
    
    
    682,740Thereafter
    
    
    2,159,414
    
    
    
    655,046
    
    
    
    2,814,460$
    3,397,876
    
    
    $
    7,577,009
    
    
    $
    10,974,885
   10




---



##### Table of Contents



Credit Facilities
  Existing Credit
    
    
    AvailableFacilities
    
    
    CapacityCentexCentex CorporationMulti-Bank Revolving Credit Facility
    
    $
    800,000
    
    
    $
    620,000
    (1)(2)Multi-Bank Revolving Letter of Credit Facility
    
    
    300,000
    
    
    
    22,494
    (3)1,100,000
    
    
    
    642,494
    (4)International HomebuildingMulti-Bank Revolving Credit Facility
    
    
    306,816
    
    
    
    158,822Bonded Facility
    
    
    13,536
    
    
    
    13,536320,352
    
    
    
    172,358
    (5)Financial ServicesMortgage Servicer Advance Facility
    
    
    100,000
    
    
    
    100,000
    (6)Secured Credit Facilities
    
    
    515,000
    
    
    
    219,837
    (7)Harwood Street Funding I, LLC Facility
    
    
    3,000,000
    
    
    
    1,346,100Harwood Street Funding II, LLC Facility
    
    
    4,000,000
    
    
    
    3,029,1557,615,000
    
    
    
    4,695,092$
    9,035,352
    
    
    $
    5,509,944
    (8)
 (1)
    
    This is an unsecured, committed, multi-bank revolving credit facility, maturing in July
2007, which serves as backup for the Companys $700 million commercial paper program. As of
June 30, 2005, the $700 million commercial paper program had $180 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)
    
    This is an unsecured, committed, multi-bank revolving letter of credit facility, maturing in
July 2005. Letters of credit issued under this facility may expire no later than July 2006.(4)
    
    In July 2005, the Company replaced its $800 million revolving credit facility and $300
million revolving letter of credit facility with a $1.5 billion unsecured, committed,
multi-bank revolving credit facility, maturing in July 2010. Also in July 2005, the Company
increased the size of its commercial paper program from $700 million to $900 million.(5)
    
    The international homebuilding operations maintain a £170 ($306.8) million unsecured,
committed, multi-bank revolving credit facility, maturing in February 2008, and a £7.5 ($13.5)
million unsecured, uncommitted bonding facility, each of which is guaranteed by Centex
Corporation.(6)
    
    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.(7)
    
    CTX Mortgage Company, LLC and its related companies and Home Equity share in a $250 million
secured, committed credit facility to finance mortgage inventory. CTX Mortgage Company, LLC
and its related companies also maintain $265 million of secured, committed mortgage warehouse
facilities to finance mortgages. In July 2005, this facility was increased to $314 million.(8)
    
    The amount of available capacity consists of $5,496.4 million of committed capacity and $13.5
million of uncommitted capacity as of June 30, 2005. Although management 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
  11




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##### Table of Contents



Centex Home Equity Company, LLC and Harwood Street Funding II, LLC
  12




---



##### Table of Contents



(H) COMMITMENTS AND CONTINGENCIES
     13




---



##### Table of Contents



June 30,
    
    
    March 31,2005
    
    
    2005Balance at Beginning of Period
    
    $
    38,953
    
    
    $
    20,146Warranties Issued
    
    
    11,501
    
    
    
    46,303Settlements Made
    
    
    (10,282
    )
    
    
    (34,365
    )Changes in Liability of Pre-Existing
Warranties, Including Expirations
    
    
    (159
    )
    
    
    6,869Balance at End of Period
    
    $
    40,013
    
    
    $
    38,953
  June 30,
    
    
    March 31,2005
    
    
    2005Balance at Beginning of Period
    
    $
    18,803
    
    
    $
    25,045Provision for Losses
    
    
    608
    
    
    
    557Settlements
    
    
    (1,380
    )
    
    
    (6,799
    )Balance at End of Period
    
    $
    18,031
    
    
    $
    18,803
    (I) LAND HELD UNDER OPTION AGREEMENTS NOT OWNED AND OTHER LAND DEPOSITS
  14




---



##### Table of Contents



June 30,
    
    
    March 31,2005
    
    
    2005Cash
Deposits included in:Land Held for Development and Sale
    
    $
    167.0
    
    
    $
    141.9Land Held Under Option Agreements Not Owned
    
    
    55.9
    
    
    
    41.5Total Cash Deposits in Inventory
    
    
    222.9
    
    
    
    183.4Letters of Credit
    
    
    32.1
    
    
    
    40.4Total Invested Through Deposits or Secured with Letters of Credit
    
    $
    255.0
    
    
    $
    223.8Total
Remaining Purchase Price of Land Option Agreements
    
    $
    8,249.4
    
    
    $
    7,340.5
 (J) COMPREHENSIVE INCOME
  For the Three MonthsEnded June 30,2005
    
    
    2004Net Earnings
    
    $
    233,670
    
    
    $
    177,233Other Comprehensive Income (Loss), net of Tax:Unrealized Gain (Loss) on Hedging Instruments
    
    
    (5,707
    )
    
    
    15,043Foreign Currency Translation Adjustments
    
    
    (13,683
    )
    
    
    (2,750
    )Comprehensive Income
    
    $
    214,280
    
    
    $
    189,526
  (K) BUSINESS SEGMENTS
  15




---



##### Table of Contents



Home Building
  Financial Services
  Construction Services
  Other
  For the Three Months Ended June 30, 2005(Dollars in millions)Home
    
    
    Financial
    
    
    Construction
    
    
    
    
    
    
    IntersegmentBuilding
    
    
    Services
    
    
    Services
    
    
    Other
    
    
    Eliminations
    
    
    TotalRevenues
    
    $
    2,526.0
    
    
    $
    303.8
    
    
    $
    366.1
    
    
    $
    27.7
    
    
    $
    (3.0
    )
    
    $
    3,220.6Cost of Sales
    
    
    (1,809.3
    )
    
    
    (94.4
    )
    
    
    (344.3
    )
    
    
    (13.8
    )
    
    
    2.9
    
    
    
    (2,258.9
    )Selling, General and
Administrative
Expenses
    
    
    (378.6
    )
    
    
    (161.7
    )
    
    
    (19.2
    )
    
    
    (40.6
    )
    
    
    
    
    
    
    (600.1
    )Earnings from
Unconsolidated
Entities
    
    
    12.7
    
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    12.8Earnings (Loss) Before
Income Tax
    
    $
    350.8
    
    
    $
    47.7
    
    
    $
    2.7
    
    
    $
    (26.7
    )
    
    $
    (0.1
    )
    
    $
    374.4
 16




---



##### Table of Contents



For the Three Months Ended June 30, 2004(Dollars in millions)Home
    
    
    Financial
    
    
    ConstructionBuilding
    
    
    Services
    
    
    Services
    
    
    Other
    
    
    TotalRevenues
    
    $
    1,998.1
    
    
    $
    274.3
    
    
    $
    434.2
    
    
    $
    59.5
    
    
    $
    2,766.1Cost of Sales
    
    
    (1,473.0
    )
    
    
    (61.6
    )
    
    
    (414.3
    )
    
    
    (36.5
    )
    
    
    (1,985.4
    )Selling, General and
Administrative Expenses
    
    
    (301.8
    )
    
    
    (155.1
    )
    
    
    (15.8
    )
    
    
    (40.3
    )
    
    
    (513.0
    )Earnings from
Unconsolidated Entities
    
    
    7.8
    
    
    
    
    
    
    
    0.4
    
    
    
    
    
    
    
    8.2Earnings (Loss) Before Income Tax
    
    $
    231.1
    
    
    $
    57.6
    
    
    $
    4.5
    
    
    $
    (17.3
    )
    
    $
    275.9
  For the Three MonthsEnded June 30,2005
    
    
    2004Operating Loss from Home Services Operations
    
    $
    (2.6
    )
    
    $
    (2.6
    )Operating Earnings (Loss) from Investment Real Estate Operations
    
    
    (0.1
    )
    
    
    9.9Corporate General and Administrative Expense
    
    
    (20.6
    )
    
    
    (19.6
    )Interest Expense
    
    
    (3.4
    )
    
    
    (5.0
    )$
    (26.7
    )
    
    $
    (17.3
    )
 (L) INCOME TAXES
  (M) DERIVATIVES AND HEDGING
  17




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##### Table of Contents



Cash Flow Hedges
  Notional
    
    
    Fixed
    
    
    
    
    
    
    Accumulated OtherValue
    
    
    Interest
    
    Termination
    
    Comprehensive(in millions)
    
    
    Rate
    
    Date
    
    Income (Loss)CentexInterest rate swap
    
    $
    25.0
    
    
    
    6.7
    %
    
    October 2005
    
    $
    (276
    )Interest rate swap
    
    $
    90.2
    (1)
    
    
    4.0
    %
    
    March 2006
    
    
    247Financial ServicesInterest rate
swaps
    
    $
    90.0
    
    
    
    4.3
    %(2)
    
    Through May 2012
    
    
    (178
    )Interest rate
swaps
    
    $
    2,538.2
    
    
    
    2.9
    %(2)
    
    Through July 2008
    
    
    9,807$
    9,600
 (1)
    
    This interest rate swap hedges £50.0 million of our international homebuilding operations
outstanding debt.(2)
    
    Weighted average fixed interest rates.
   Fair Value Hedges
  Other Derivatives
   18




---



##### Table of Contents



(N) RECENT ACCOUNTING PRONOUNCEMENTS
    (O) OFF-BALANCE SHEET OBLIGATIONS
  19




---



##### Table of Contents



(P) SUBSEQUENT EVENTS
   (Q) RECLASSIFICATIONS
  20




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Executive Summary
  Revenues
 Earnings (Loss) Before Income Taxes
 
 *
    
    Other consists of the financial results of our investment real estate and home services
operations, as well as corporate general and administrative expense, interest expense and
intersegment eliminations.
   21




---



##### Table of Contents



®
    HOME BUILDING
  22




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##### Table of Contents



For the Three Months Ended June 30,2005
    
    
    2004% Change
    
    
    
    
    
    % ChangeRevenues  Housing
    
    $
    2,485.0
    
    
    
    26.3
    %
    
    $
    1,967.0
    
    
    
    33.1
    %Revenues  Land Sales and Other
    
    
    41.0
    
    
    
    31.8
    %
    
    
    31.1
    
    
    
    14.8
    %Cost of Sales  Housing
    
    
    (1,772.2
    )
    
    
    23.6
    %
    
    
    (1,433.8
    )
    
    
    30.0
    %Cost of Sales  Land Sales and Other
    
    
    (37.1
    )
    
    
    (5.4
    %)
    
    
    (39.2
    )
    
    
    58.1
    %Selling, General and Administrative Expenses
    
    
    (378.6
    )
    
    
    25.4
    %
    
    
    (301.8
    )
    
    
    36.1
    %Earnings from Unconsolidated Entities
    
    
    12.7
    
    
    
    62.8
    %
    
    
    7.8
    
    
    
    30.0
    %Operating Earnings
    
    $
    350.8
    
    
    
    51.8
    %
    
    $
    231.1
    
    
    
    43.2
    %Operating Earnings as a Percentage of Revenues
    
    
    13.9
    %
    
    
    NM
    *
    
    
    11.6
    %
    
    
    NM
 *NM = Not meaningful
  Domestic
  For the Three Months Ended June 30,2005
    
    
    2004% Change
    
    
    
    
    
    % ChangeUnits Closed
    
    
    8,235
    
    
    
    11.5
    %
    
    
    7,383
    
    
    
    16.3
    %Average Unit Sales Price
    
    $
    286,354
    
    
    
    12.9
    %
    
    $
    253,592
    
    
    
    9.0
    %Operating Earnings Per Unit
    
    $
    41,397
    
    
    
    36.7
    %
    
    $
    30,284
    
    
    
    22.8
    %Average Operating Neighborhoods
    
    
    605
    
    
    
    6.1
    %
    
    
    570
    
    
    
    2.2
    %Closings Per Average Neighborhood
    
    
    13.6
    
    
    
    4.6
    %
    
    
    13.0
    
    
    
    14.0
    %
 As of June 30,2005
    
    
    2004% Change
    
    
    
    
    
    % ChangeBacklog Units
    
    
    20,773
    
    
    
    21.8
    %
    
    
    17,062
    
    
    
    20.9
    %Lots Owned
    
    
    106,584
    
    
    
    28.6
    %
    
    
    82,853
    
    
    
    27.9
    %Lots Controlled
    
    
    179,186
    
    
    
    38.6
    %
    
    
    129,315
    
    
    
    53.1
    %Total Lots Owned and Controlled
    
    
    285,770
    
    
    
    34.7
    %
    
    
    212,168
    
    
    
    42.2
    %
 23




---



##### Table of Contents




    
    Growth in average neighborhoods
    
    Growth in closings per average neighborhood
    
    Increases in average unit sales price
    
    Operating margin improvement
         24




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##### Table of Contents



International
  For the Three Months Ended June 30,2005
    
    
    2004% ChangeRevenues
    
    $
    126.9
    
    
    
    28.2
    %
    
    $
    99.0Operating Earnings
    
    $
    9.9
    
    
    
    32.0
    %
    
    $
    7.5Units Closed
    
    
    358
    
    
    
    14.0
    %
    
    
    314
  FINANCIAL SERVICES
   For the Three Months Ended June 30,2005
    
    
    2004% Change
    
    
    
    
    
    % ChangeRevenues
    
    $
    303.8
    
    
    
    10.8
    %
    
    $
    274.3
    
    
    
    2.8
    %Cost of Sales  Interest Expense
    
    
    (94.4
    )
    
    
    53.2
    %
    
    
    (61.6
    )
    
    
    20.8
    %Selling, General and
Administrative Expenses
    
    
    (161.7
    )
    
    
    4.3
    %
    
    
    (155.1
    )
    
    
    3.2
    %Operating Earnings
    
    $
    47.7
    
    
    
    (17.2
    %)
    
    $
    57.6
    
    
    
    (12.2
    %)Interest Margin
    
    $
    87.4
    
    
    
    (10.5
    %)
    
    $
    97.6
    
    
    
    75.2
    %Origination Volume
    
    $
    5,222.3
    
    
    
    5.7
    %
    
    $
    4,942.8
    
    
    
    (9.0
    %)Number of Loans Originated
    
    
    29,206
    
    
    
    (4.8
    %)
    
    
    30,693
    
    
    
    (15.3
    %)Number of Loan Applications
    
    
    122,812
    
    
    
    6.8
    %
    
    
    114,978
    
    
    
    2.7
    %
  25




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##### Table of Contents



Prime Mortgage Lending
  For the Three Months Ended June 30,2005
    
    
    2004% Change
    
    
    
    
    
    % ChangeRevenues
    
    $
    110.0
    
    
    
    0.8
    %
    
    $
    109.1
    
    
    
    (25.8
    %)Cost of Sales  Interest Expense
    
    
    (12.8
    )
    
    
    82.9
    %
    
    
    (7.0
    )
    
    
    250.0
    %Selling, General and
Administrative Expenses
    
    
    (75.9
    )
    
    
    8.3
    %
    
    
    (70.1
    )
    
    
    (25.1
    %)Operating Earnings
    
    $
    21.3
    
    
    
    (33.4
    %)
    
    $
    32.0
    
    
    
    (37.7
    %)Operating Margin
    
    
    19.4
    %
    
    
    NM
    
    
    
    29.3
    %
    
    
    NMInterest Margin
    
    $
    10.6
    
    
    
    (32.5
    %)
    
    $
    15.7
    
    
    
    528.0
    %Average Interest Earning Assets
    
    $
    1,489.5
    
    
    
    (10.4
    %)
    
    $
    1,661.6
    
    
    
    424.2
    %Average Yield
    
    
    6.29
    %
    
    
    NM
    
    
    
    5.47
    %
    
    
    NMAverage Interest Bearing
Liabilities
    
    $
    1,488.1
    
    
    
    (7.1
    %)
    
    $
    1,601.3
    
    
    
    546.5
    %Average Rate Paid
    
    
    3.46
    %
    
    
    NM
    
    
    
    1.72
    %
    
    
    NM
     26




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##### Table of Contents



For the Three Months Ended June 30,2005
    
    
    2004% ChangeLoan Sales to Investors
    
    $
    2,553.2
    
    
    
    (0.6
    %)
    
    $
    2,568.0Gain on Sale of Mortgage Loans
    
    $
    39.4
    
    
    
    16.2
    %
    
    $
    33.9
   For the Three Months Ended June 30,2005
    
    
    2004% Change
    
    
    
    
    
    % ChangeOrigination Volume (in millions)
    
    $
    3,820.7
    
    
    
    9.1
    %
    
    $
    3,501.6
    
    
    
    (23.1
    %)Number of Loans OriginatedBuilder
    
    
    5,619
    
    
    
    12.0
    %
    
    
    5,019
    
    
    
    13.2
    %Retail
    
    
    12,311
    
    
    
    (13.0
    %)
    
    
    14,154
    
    
    
    (37.9
    %)17,930
    
    
    
    (6.5
    %)
    
    
    19,173
    
    
    
    (29.6
    %)Number of Loan ApplicationsBuilder
    
    
    7,316
    
    
    
    19.0
    %
    
    
    6,146
    
    
    
    1.4
    %Retail
    
    
    10,589
    
    
    
    (2.6
    %)
    
    
    10,867
    
    
    
    (57.0
    %)17,905
    
    
    
    5.2
    %
    
    
    17,013
    
    
    
    (45.7
    %)Average Loan Size
    
    $
    213,100
    
    
    
    16.7
    %
    
    $
    182,600
    
    
    
    9.1
    %
   27




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##### Table of Contents



Sub-Prime Home Equity Lending
  For the Three Months Ended June 30,2005
    
    
    2004% Change
    
    
    
    
    
    % ChangeRevenues
    
    $
    195.4
    
    
    
    18.3
    %
    
    $
    165.2
    
    
    
    37.8
    %Cost of Sales  Interest Expense
    
    
    (81.6
    )
    
    
    49.5
    %
    
    
    (54.6
    )
    
    
    11.4
    %Selling, General and Administrative
Expenses:Operating Expenses
    
    
    (61.0
    )
    
    
    4.8
    %
    
    
    (58.2
    )
    
    
    42.3
    %Loan Loss Provision
    
    
    (25.3
    )
    
    
    (5.6
    %)
    
    
    (26.8
    )
    
    
    69.6
    %Operating Earnings
    
    $
    27.5
    
    
    
    7.4
    %
    
    $
    25.6
    
    
    
    80.3
    %Interest Margin
    
    $
    76.8
    
    
    
    (6.2
    %)
    
    $
    81.9
    
    
    
    53.9
    %Average Interest Earning Assets
    
    $
    8,165.5
    
    
    
    21.0
    %
    
    $
    6,746.5
    
    
    
    38.4
    %Average Yield
    
    
    7.76
    %
    
    
    NM
    
    
    
    8.09
    %
    
    
    NMAverage Interest Bearing Liabilities
    
    $
    8,355.8
    
    
    
    19.7
    %
    
    $
    6,979.3
    
    
    
    37.8
    %Average Rate Paid
    
    
    3.91
    %
    
    
    NM
    
    
    
    3.13
    %
    
    
    NM
       28




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##### Table of Contents



For the Three Months Ended June 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeOrigination Volume (in millions)
    
    $
    1,401.6
    
    
    
    (2.7
    %)
    
    $
    1,441.2
    
    
    
    64.2
    %Number of Loans Originated
    
    
    11,276
    
    
    
    (2.1
    %)
    
    
    11,520
    
    
    
    28.1
    %Number of Loan Applications
    
    
    104,907
    
    
    
    7.1
    %
    
    
    97,965
    
    
    
    21.5
    %Average Loan Size
    
    $
    124,300
    
    
    
    (0.6
    %)
    
    $
    125,100
    
    
    
    28.2
    %
   For the Three Months Ended June 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeServicing Portfolio:Number of LoansPortfolio Accounting Method
    
    
    85,120
    
    
    
    8.7
    %
    
    
    78,331
    
    
    
    19.7
    %Serviced for Others
    
    
    17,501
    
    
    
    32.1
    %
    
    
    13,253
    
    
    
    3.5
    %Total
    
    
    102,621
    
    
    
    12.1
    %
    
    
    91,584
    
    
    
    17.0
    %Dollars in billionsPortfolio Accounting Method
    
    $
    8.21
    
    
    
    18.6
    %
    
    $
    6.92
    
    
    
    35.4
    %Serviced for Others
    
    
    1.56
    
    
    
    66.0
    %
    
    
    0.94
    
    
    
    25.3
    %Total
    
    $
    9.77
    
    
    
    24.3
    %
    
    $
    7.86
    
    
    
    34.1
    %
    29




---



##### Table of Contents



CONSTRUCTION SERVICES
  For the Three Months Ended June 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeRevenues
    
    $
    366.1
    
    
    
    (15.7
    %)
    
    $
    434.2
    
    
    
    15.5
    %Operating Earnings
    
    $
    2.7
    
    
    
    (40.0
    %)
    
    $
    4.5
    
    
    
    2.2
    %New Contracts Executed
    
    $
    718.2
    
    
    
    112.5
    %
    
    $
    338.0
    
    
    
    29.4
    %
 As of June 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeBacklog of Uncompleted Contracts
    
    $
    2,353.3
    
    
    
    42.6
    %
    
    $
    1,650.2
    
    
    
    17.5
    %
   30




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##### Table of Contents



OTHER
  For the Three Months Ended June 30,2005
    
    
    2004% Change
    
    
    
    
    
    
    % ChangeOperating Loss from Home Services Operations
    
    $
    (2.6
    )
    
    
    0.0
    %
    
    $
    (2.6
    )
    
    
    100.0
    %Operating Earnings (Loss) from Investment
Real Estate Operations
    
    
    (0.1
    )
    
    
    (101.0
    %)
    
    
    9.9
    
    
    
    NMCorporate General and Administrative Expense
    
    
    (20.6
    )
    
    
    5.1
    %
    
    
    (19.6
    )
    
    
    2.6
    %Interest Expense
    
    
    (3.4
    )
    
    
    (32.0
    %)
    
    
    (5.0
    )
    
    
    (67.7
    %)Operating Loss
    
    $
    (26.7
    )
    
    
    54.3
    %
    
    $
    (17.3
    )
    
    
    (52.3
    %)
     31




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##### Table of Contents



FINANCIAL CONDITION AND LIQUIDITY
  For the Three Months Ended June 30,2005
    
    
    2004Net Cash (Used in) Provided byCentex*Operating Activities
    
    $
    (696,523
    )
    
    $
    (398,499
    )Investing Activities
    
    
    (47,813
    )
    
    
    (20,357
    )Financing Activities
    
    
    301,727
    
    
    
    395,169Effect of Exchange Rate on Cash
    
    
    (474
    )
    
    
    541(443,083
    )
    
    
    (23,146
    )Financial ServicesOperating Activities
    
    
    (213,622
    )
    
    
    (71,056
    )Investing Activities
    
    
    (321,867
    )
    
    
    (451,538
    )Financing Activities
    
    
    538,873
    
    
    
    518,6683,384
    
    
    
    (3,926
    )Centex Corporation and SubsidiariesOperating Activities
    
    
    (980,212
    )
    
    
    (452,014
    )Investing Activities
    
    
    (324,613
    )
    
    
    (489,436
    )Financing Activities
    
    
    865,600
    
    
    
    913,837Effect of Exchange Rate on Cash
    
    
    (474
    )
    
    
    541Net Decrease in Cash
    
    $
    (439,699
    )
    
    $
    (27,072
    )
 *
    
    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.
   32




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##### Table of Contents



Existing Credit
    
    
    AvailableFacilities
    
    
    CapacityCentexCentex CorporationMulti-Bank Revolving Credit Facility
    
    $
    800,000
    
    
    $
    620,000

    (1) (2)Multi-Bank Revolving Letter of Credit Facility
    
    
    300,000
    
    
    
    22,494

    (3)1,100,000
    
    
    
    642,494

    (4)International HomebuildingMulti-Bank Revolving Credit Facility
    
    
    306,816
    
    
    
    158,822Bonded Facility
    
    
    13,536
    
    
    
    13,536320,352
    
        
    
    172,358
    
    (5)Financial ServicesMortgage Servicer Advance Facility
        
        
    100,000
        
        
    
    100,000
    
    (6)Secured Credit Facilities
        
        
    515,000
        
        
    
    219,837
    
    (7)Harwood Street Funding I, LLC Facility
        
        
    3,000,000
        
        
        
    1,346,100Harwood Street Funding II, LLC Facility
        
        
    4,000,000
        
        
        
    3,029,1557,615,000
        
        
        
    4,695,092$
    9,035,352
        
        
    $
    5,509,944
    
    (8)
 (1)
    
    This is an unsecured, committed, multi-bank revolving credit facility, maturing in July
2007, which serves as backup for our $700 million commercial paper program. As of June 30,
2005, the $700 million commercial paper program had $180 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)
    
    This is an unsecured, committed, multi-bank revolving letter of credit facility, maturing in
July 2005. Letters of credit issued under this facility may expire no later than July 2006.(4)
    
    In July 2005, we replaced our $800 million revolving credit facility and $300 million
revolving letter of credit facility with a $1.5 billion unsecured, committed, multi-bank
revolving credit facility, maturing in July 2010. Also in July 2005, we increased the size of
our commercial paper program from $700 million to $900 million.(5)
    
    The international homebuilding operations maintain a £170 ($306.8) million unsecured,
committed, multi-bank revolving credit facility, maturing in February 2008, and a £7.5 ($13.5)
million unsecured, uncommitted bonding facility, each of which is guaranteed by Centex
Corporation.(6)
    
    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.(7)
    
    CTX Mortgage Company, LLC and its related companies and Home Equity share in a $250 million
secured, committed credit facility to finance mortgage inventory. CTX Mortgage Company, LLC
and its related companies also maintain $265 million of secured, committed mortgage warehouse
facilities to finance mortgages. In July 2005, this facility was increased to $314 million.(8)
    
    The amount of available capacity consists of $5,496.4 million of committed capacity and $13.5
million of uncommitted capacity as of June 30, 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.
  33




---



##### Table of Contents



CentexShort-term Debt:Short-term Notes Payable
    
    $
    188,567Senior Debt:Medium-term Note Programs, weighted-average 4.59%, due through 2008
    
    
    398,000Senior Notes, weighted-average 5.89%, due through 2016
    
    
    2,708,601Other Indebtedness, weighted-average 5.40%, due through 2015
    
    
    191,418Subordinated Debt:Subordinated Debentures, 8.75%, due in 2007
    
    
    99,8573,586,443Financial ServicesShort-term Debt:Short-term Notes Payable
    
    
    295,163Harwood Street Funding I, LLC Medium-term Notes
    
    
    250,000Harwood Street Funding II, LLC Medium-term Notes
    
    
    200,000Harwood Street Funding I and II, LLC Secured Liquidity Notes
    
    
    1,962,847Home Equity Asset-Backed Certificates, weighted-average 4.32%, due
through 2036
    
    
    7,367,009Harwood Street Funding I, LLC Variable Rate Subordinated Extendable
Certificates, weighted-average 5.34%, due through 2010
    
    
    60,000Harwood Street Funding II, LLC Variable Rate Subordinated Notes,
weighted-average 5.20%, due through 2011
    
    
    150,00010,285,019Total
    
    $
    13,871,462
  34




---



##### Table of Contents



CERTAIN OFF-BALANCE SHEET OBLIGATIONS
  Joint Ventures
  CRITICAL ACCOUNTING ESTIMATES
  Impairment of Long-Lived Assets
  Goodwill
  35




---



##### Table of Contents



Inventory Valuation
    Land Held Under Option Agreements Not Owned
     Valuation of Residential Mortgage Loans Held for Investment
   36




---



##### Table of Contents



Mortgage Securitization Residual Interest
  Loan Origination Reserve
   Warranty Accruals
  Insurance Accruals
  37




---



##### Table of Contents



RECENT ACCOUNTING PRONOUNCEMENTS
    
 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS


38



---



##### 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 operations;
    
    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.
  
    
    Proposed legislation that restricts the packaging of mortgages into investment
securities and 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 and negatively impact the demand for new homes in affected
areas;
    
    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 to eliminate or substantially modify
certain real estate related income tax deductions 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.
  39




---



##### 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
   40




---



##### Table of Contents



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  Issuer Purchases of Equity SecuritiesTotal Number of
    
    
    Maximum Number ofTotal Number
    
    
    
    
    
    
    Shares Purchased as
    
    
    Shares that May Yetof Shares
    
    
    Average Price
    
    
    Part of Publicly
    
    
    Be Purchased UnderPurchased
    
    
    Paid Per Share
    
    
    Announced Plan
    
    
    the PlanPeriod
    
    
    
    
    
    
    
    
    
    
    5,625,600
    
    
    
    2,724,000April 1-30
    
    No shares repurchased
    
    
    
    
    
    
    May 1-31
    
    No shares repurchased
    
    
    
    
    
    
    June 1-30 (1) (2)
    
    
    764,133
    
    
    $
    68.38
    
    
    
    750,000
    
    
    
    (750,000
    )Total
    
    
    764,133
    
    
    $
    68.38
    
    
    
    6,375,600
    
    
    
    1,974,000
  (1)
    
    Of the 764,133 shares repurchased for the quarter ended June 30, 2005, 14,133 shares
represent the delivery by employees or directors of previously issued shares to the Company 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 open market stock
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 May 15, 2003
(incorporated by reference from Exhibit 3.2 to Centexs Quarterly Report on Form
10-Q for the quarter ended June 30, 2003).10.1
    
    Credit Agreement, dated July 1, 2005, among Centex Corporation,
Bank of America, N.A., as administrative agent, and the lenders named therein
(incorporated by reference from Exhibit 10.1 to Centexs Current Report on Form
8-K filed on July 8, 2005).10.2
    
    Form of Director Indemnification Agreement* (incorporated by
reference from Exhibit 10.1 to Centexs Current Report on Form 8-K filed on July
15, 2005).10.3
    
    Form of deferred compensation agreement for Executive Deferred
Compensation Plan.*12.1
    
    Computation of Ratio of Earnings to Fixed Charges.
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##### Table of Contents



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



Signatures
  CENTEX CORPORATIONRegistrantAugust 2, 2005
    
    /s/ Leldon E. EcholsLeldon E. EcholsExecutive Vice President andChief Financial Officer(principal financial officer)August 2, 2005
    
    /s/ Mark D. KempMark D. KempSenior Vice President-Controller(principal accounting officer)
 43