CTX Qwest Corp. 7.00% Notes Due 2052

DALLAS, Oct. 23 /PRNewswire-FirstCall/ -- Centex Corporation (NYSE:CTX) today reported financial results for its fiscal second quarter ended Sept. 30, 2007. Highlights of the quarter ended Sept. 30, 2007 (compared to last year's second quarter): -- Loss from continuing operations was $5.26 per diluted share -- Sales (orders) decreased 13% to 5,953 -- Reduced homebuilding SG&A expenses by 21% or $80 million -- Reduced inventory of unsold homes by 28% to 4,708 -- Homebuilding cancellation rate decreased 200 bps to 35.4% "Market conditions were extremely challenging during the quarter, reflecting the serious disruptions in the credit and mortgage markets that occurred during that period," said Tim Eller, Centex Corporation chairman and CEO. "In response, we meaningfully reduced prices in order to improve affordability for our home buyers. These actions were consistent with our continued focus on selling homes and generating cash as we structure for profitability." CORPORATE RESULTS Fiscal 2008's second quarter revenues were $2.22 billion, 21% lower than the same quarter last year. The loss from continuing operations for the second quarter was $644 million, or a loss of $5.26 per diluted share, down from earnings of $80 million, or $0.65 per diluted share, in the previous year's fiscal second quarter. HOME BUILDING Fiscal 2008's second quarter revenues were $2.11 billion, 21% lower than the same quarter last year mainly as a result of a 14% decrease in closings to 7,350 homes. Home building reported an operating loss of $953 million for the quarter, after $983 million, or $4.97 per diluted share, in impairments and other land charges. Housing operating earnings (housing revenues less housing cost of sales and SG&A) were $26 million, down from earnings of $259 million in the previous year. The decrease is a result of lower unit volume, an 8% decrease in the unit average sales price and higher sales incentives. For the current six months, revenues were $3.91 billion, 26% lower than the same period last year. The reported homebuilding operating loss was $1.12 billion for the six-month period this year versus earnings of $461 million in the same period last year. FINANCIAL SERVICES Financial Services reported an operating loss of $54 million this quarter, down from earnings of $26 million in the second quarter of fiscal 2007, due principally to increased reserves for potential future losses on its mortgage loan originations. CTX Mortgage originated loans for 80% of Centex Homes' buyers during the second quarter, equal to last year's second quarter. The operating loss was $39 million for the six-month period this year, down from earnings of $49 million in the same period last year. Centex's Financial Services operations provide Centex home buyers with a streamlined home-closing and settlement process. NON-GAAP FINANCIAL MEASURES Explanations of non-GAAP financial measures used in this press release and the accompanying attachments, and reconciliations of the non-GAAP financial measures to the comparable GAAP financial measures, are given in the applicable attachments. Centex's senior management will conduct a conference call to discuss the second quarter fiscal year 2008 financial results at 10 a.m. EDT (9 a.m. CDT) on Wednesday, Oct. 24. The conference call, accompanied by a slide presentation, will be webcast simultaneously on the Centex Web site at http://www.centex.com/. A replay of the call, as well as the presentation, will be archived on that site. Forward-Looking Statements. This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the context of the statement and generally arise when Centex is discussing its beliefs, estimates or expectations. Such statements include projections, forecasts, plans and objectives of management for future operations and operating and financial performance, as well as any related assumptions. These statements are not historical facts or guarantees of future performance, but instead represent only Centex's belief at the time the statements were made regarding future events, which are subject to significant risks, uncertainties and other factors, many of which are outside of Centex's control. Actual results and outcomes may differ materially from what is expressed or forecast in such forward-looking statements. These risks and uncertainties are described in greater detail in Centex's most recent Annual Report on Form 10-K for the fiscal year ended March 31, 2007 (including under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations"), as well as recent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, which are on file with the SEC and may be obtained free of charge through the Web site maintained by the SEC at http://www.sec.gov/. The factors discussed in these reports include, but are not limited to, the effects of the current downturn in the homebuilding industry; changes in national or regional economic or business conditions, including employment levels and interest rates; competition; customer cancellations; shortages or price changes in raw materials or labor; the effects of recent disruptions in the mortgage finance industry, including tightening of credit and reduction in liquidity; the availability of adequate sources of financing; and other factors that could affect demand for our homes or mortgage loans, the profitability of our operations or our access to financing. All forward-looking statements made in this press release are made as of the date hereof, and the risk that actual results will differ materially from expectations expressed in this press release will increase with the passage of time. Centex makes no commitment, and disclaims any duty, to update or revise any forward-looking statement to reflect future events or changes in Centex's expectations. Attachment 1 Centex Corporation and Subsidiaries Revenues and Earnings by Lines of Business (Dollars in thousands, except per share data) Quarter Ended September 30, (unaudited) 2007 2006 (C) Change Revenues Home Building (A) $2,105,484 $2,658,047 (21%) Financial Services 80,700 120,578 (33%) Other 34,744 36,963 (6%) Total $2,220,928 $2,815,588 (21%) Operating Earnings (Loss) Home Building (A) $(952,693) $148,735 Financial Services (54,082) 26,164 Other 19,622 1,268 Total Operating Earnings (Loss) (987,153) 176,167 Corporate General and Administrative Expenses (B) (34,540) (44,998) Earnings (Loss) from Continuing Operations Before Income Taxes (1,021,693) 131,169 Income Tax (Provision) Benefit 377,860 (50,747) Earnings (Loss) from Continuing Operations (643,833) 80,422 Earnings from Discontinued Operations, net - 56,978 Net Earnings (Loss) $(643,833) $137,400 Earnings (Loss) Per Share - Basic Continuing Operations $(5.26) $0.67 Discontinued Operations - 0.48 Earnings (Loss) Per Share - Basic $(5.26) $1.15 Earnings (Loss) Per Share - Diluted Continuing Operations $(5.26) $0.65 Discontinued Operations - 0.46 Earnings (Loss) Per Share - Diluted $(5.26) $1.11 Average Shares Outstanding: Basic 122,301,587 119,634,303 Diluted 122,301,587 123,504,535 Six Months Ended September 30, (unaudited) 2007 2006 (C) Change Revenues Home Building (A) $3,909,304 $5,307,884 (26%) Financial Services 178,666 243,319 (27%) Other 69,447 68,285 2% Total $4,157,417 $5,619,488 (26%) Operating Earnings (Loss) Home Building (A) $(1,124,472) $460,648 Financial Services (39,113) 49,251 Other 25,756 (499) Total Operating Earnings (Loss) (1,137,829) 509,400 Corporate General and Administrative Expenses (B) (79,521) (99,768) Earnings (Loss) from Continuing Operations Before Income Taxes (1,217,350) 409,632 Income Tax (Provision) Benefit 442,182 (156,782) Earnings (Loss) from Continuing Operations (775,168) 252,850 Earnings from Discontinued Operations, net 3,376 44,807 Net Earnings (Loss) $(771,792) $297,657 Earnings (Loss) Per Share - Basic Continuing Operations $(6.36) $2.09 Discontinued Operations 0.03 0.37 Earnings (Loss) Per Share - Basic $(6.33) $2.46 Earnings (Loss) Per Share - Diluted Continuing Operations $(6.36) $2.02 Discontinued Operations 0.03 0.36 Earnings (Loss) Per Share - Diluted $(6.33) $2.38 Average Shares Outstanding: Basic 121,888,041 120,795,315 Diluted 121,888,041 124,862,624 (A) See Attachment 3 for detailed home building segment revenues and earnings. (B) In connection with the change in the Company's reporting segments at March 31, 2007, home building corporate general and administrative expenses have been reclassified to Corporate General and Administrative Expenses consistent with the structure of the internal organization. Prior periods have been restated accordingly. (C) Certain prior year items have been reclassified to conform to current period classifications. Attachment 2 Centex Corporation and Subsidiaries Condensed Consolidated Balance Sheet (Dollars in millions) (unaudited) September 30, March 31, 2007 2007 Assets Cash - Unrestricted $100 $883 Restricted 121 146 Receivables - Residential Mortgage Loans Held for Sale 935 1,688 Other Receivables 349 228 Inventories - Homebuilding 7,596 8,633 Land Held Under Option Agreements not Owned 140 282 Other 31 36 Investments 269 282 Property and Equipment, net 103 136 Goodwill 160 219 Deferred Charges and Other Assets 1,166 667 $10,970 $13,200 Liabilities and Stockholders' Equity Accounts Payable and Accrued Liabilities $2,250 $2,344 Debt - Non-Financial Services 3,659 3,904 Financial Services 801 1,663 Minority Interests 96 177 Stockholders' Equity (A) 4,164 5,112 $10,970 $13,200 (A) Effective April 1, 2007, the Company adopted Financial Accounting Standards FIN 48, "Accounting for Uncertainty in Income Taxes." The change in accounting for income taxes reduced retained earnings by $208 and stockholders' equity by $213. Attachment 3 Centex Corporation and Subsidiaries Home Building Revenues and Earnings (Dollars in thousands) Quarter Ended September 30, (unaudited) 2007 2006 Change Home Building Revenues East $488,230 $572,540 (15%) Southeast 260,122 382,309 (32%) Central 221,939 283,528 (22%) Texas 256,306 267,697 (4%) Northwest 395,851 536,704 (26%) Southwest 426,290 549,008 (22%) Other Home Building 56,746 66,261 (14%) Total Home Building $2,105,484 $2,658,047 (21%) Home Building Operating Earnings (Loss) (A) East $17,010 $75,556 Southeast (153,088) 23,120 Central (52,101) 188 Texas 19,708 23,548 Northwest (195,767) 77,841 Southwest (480,143) (56,206) Other Home Building (108,312) 4,688 Total Home Building $(952,693) $148,735 Six Months Ended September 30, (unaudited) 2007 2006 Change Home Building Revenues East $849,006 $1,116,963 (24%) Southeast 473,979 780,091 (39%) Central 407,008 573,442 (29%) Texas 491,039 512,053 (4%) Northwest 791,376 1,041,583 (24%) Southwest 797,494 1,141,041 (30%) Other Home Building 99,402 142,711 (30%) Total Home Building $3,909,304 $5,307,884 (26%) Home Building Operating Earnings (Loss) (A) East $35,062 $158,535 Southeast (166,105) 83,722 Central (58,468) 9,821 Texas 33,844 43,895 Northwest (227,848) 151,131 Southwest (595,743) (8,036) Other Home Building (145,214) 21,580 Total Home Building $(1,124,472) $460,648 (A) Operating Earnings above exclude home building corporate general and administrative expenses which have been reclassified to Corporate General and Administrative Expenses in connection with the change in the Company's reporting segments at March 31, 2007. Further information regarding the home building reporting segments shown above may be found in Part 1, Item 1 (Business) of Centex's Form 10-K for the fiscal year ended March 31, 2007. Prior periods have been restated accordingly. Attachment 4 Centex Corporation and Subsidiaries Supplemental Home Building Data (Dollars in thousands, except per unit data) (unaudited) MARGIN DATA Quarter Ended September 30, 2007 2006 Revenues - Housing $2,063,999 100.0% $2,601,839 100.0% Cost of Sales - Housing (1,741,203) (84.4%) (1,967,634) (75.6%) Gross Margin - Housing 322,796 15.6% 634,205 24.4% Revenues - Land Sales & Other 41,485 56,208 Cost of Sales - Land Sales & Other (927,239) (165,070) Gross Margin - Land Sales & Other (885,754) (108,862) Total Gross Margin (562,958) (26.7%) 525,343 19.8% Selling, General & Administrative (A) (296,631) (14.1%) (375,629) (14.1%) Goodwill Impairment (61,322) (2.9%) - -% Other Income (Expense) (B) (31,782) (1.5%) (979) (0.1%) Operating Earnings (Loss) $(952,693) (45.2%) $148,735 5.6% Units Closed 7,350 8,525 Average Unit Sales Price $280,816 $305,201 % Change (8.0%) 2.9% Average Neighborhoods 658 692 % Change (4.9%) 12.5% Six Months Ended September 30, 2007 2006 Revenues - Housing $3,838,737 100.0% $5,163,897 100.0% Cost of Sales - Housing (3,222,554) (83.9%) (3,834,145) (74.2%) Gross Margin - Housing 616,183 16.1% 1,329,752 25.8% Revenues - Land Sales & Other 70,567 143,987 Cost of Sales - Land Sales & Other (1,102,806) (269,847) Gross Margin - Land Sales & Other (1,032,239) (125,860) Total Gross Margin (416,056) (10.6%) 1,203,892 22.7% Selling, General & Administrative (A) (595,259) (15.2%) (752,933) (14.2%) Goodwill Impairment (61,322) (1.6%) - -% Other Income (Expense) (B) (51,835) (1.4%) 9,689 0.2% Operating Earnings (Loss) $(1,124,472) (28.8%) $460,648 8.7% Units Closed 13,445 16,843 Average Unit Sales Price $285,514 $306,590 % Change (6.9%) 5.1% Average Neighborhoods 667 680 % Change (1.9%) 11.3% (A) Selling, General & Administrative expenses above are those associated with field operations. As noted on Attachments 1 and 3, home building corporate general and administrative expenses have been reclassified to Corporate General and Administrative Expense and are no longer included in the calculation of home building operating earnings, consistent with the structure of the internal organization. Prior periods have been restated accordingly. (B) Other Income (Expense) includes losses from unconsolidated entities of $36,840, $5,706, $62,193 and $201, respectively. IMPAIRMENTS AND WRITE-OFFS Quarter Ended Six Months Ended September 30, September 30, 2007 2006 2007 2006 Impairment Charges $846,887 $30,024 $989,479 $30,024 Write-offs of Land Deposits and Pre-Acquisition Costs 38,318 89,484 61,188 125,786 Goodwill Impairment 61,322 - 61,322 - Share of Joint Venture Impairments 36,612 10,500 63,662 10,500 Total Impairments and Write-offs $983,139 $130,008 $1,175,651 $166,310 LOT POSITION As of September 30, 2007 2006 Change Lot Owned and Controlled: Lots Owned 92,035 109,854 (16%) Lots Controlled 39,480 135,749 (71%) Total 131,515 245,603 (46%) Attachment 5 Centex Corporation and Subsidiaries Supplemental Home Building Data Housing Activity by Geographic Area (Unaudited) Closings (Units) Quarter Ended September 30, 2007 2006 Change East 1,553 1,725 (10%) Southeast 965 1,305 (26%) Central 1,079 1,274 (15%) Texas 1,490 1,608 (7%) Northwest 1,009 1,161 (13%) Southwest 1,137 1,275 (11%) Other Home Building 117 177 (34%) 7,350 8,525 (14%) Closings (Units) Six Months Ended September 30, 2007 2006 Change East 2,672 3,378 (21%) Southeast 1,681 2,498 (33%) Central 1,947 2,594 (25%) Texas 2,890 3,114 (7%) Northwest 1,996 2,251 (11%) Southwest 2,032 2,639 (23%) Other Home Building 227 369 (38%) 13,445 16,843 (20%) Housing Revenues (Dollars in thousands) Quarter Ended September 30, 2007 2006 Change East $474,666 $571,021 (17%) Southeast 253,061 369,567 (32%) Central 220,727 278,911 (21%) Texas 252,313 254,670 (1%) Northwest 395,155 535,351 (26%) Southwest 423,144 538,676 (21%) Other Home Building 44,933 53,643 (16%) $2,063,999 $2,601,839 (21%) Housing Revenues (Dollars in thousands) Six Months Ended September 30, 2007 2006 Change East $829,539 $1,114,994 (26%) Southeast 461,184 740,575 (38%) Central 403,747 567,176 (29%) Texas 484,704 487,848 (1%) Northwest 787,713 1,028,713 (23%) Southwest 791,075 1,113,412 (29%) Other Home Building 80,775 111,179 (27%) $3,838,737 $5,163,897 (26%) Sales (Orders) Backlog (Units) As of September 30, 2007 2006 Change East 1,575 2,461 (36%) Southeast 1,310 2,802 (53%) Central 1,677 2,003 (16%) Texas 1,832 2,619 (30%) Northwest 1,514 2,105 (28%) Southwest 1,653 2,915 (43%) Other Home Building 72 717 (90%) 9,633 15,622 (38%) Sales (Orders) Backlog (Dollars in thousands) As of September 30, 2007 2006 Change East $512,869 $791,961 (35%) Southeast 335,780 886,006 (62%) Central 330,122 415,477 (21%) Texas 310,524 413,918 (25%) Northwest 621,031 964,214 (36%) Southwest 540,387 1,311,353 (59%) Other Home Building 26,674 281,043 (91%) $2,677,387 $5,063,972 (47%) Sales (Orders) (Units) Quarter Ended September 30, 2007 2006 Change East 1,117 1,217 (8%) Southeast 729 815 (11%) Central 907 1,027 (12%) Texas 1,267 1,710 (26%) Northwest 791 996 (21%) Southwest 1,085 1,052 3% Other Home Building 57 11 418% 5,953 6,828 (13%) Sales (Orders) (Units) Six Months Ended September 30, 2007 2006 Change East 2,399 2,766 (13%) Southeast 1,472 1,832 (20%) Central 1,880 2,335 (19%) Texas 2,702 3,544 (24%) Northwest 1,705 2,142 (20%) Southwest 2,182 2,381 (8%) Other Home Building 87 78 12% 12,427 15,078 (18%) Attachment 6 Centex Corporation and Subsidiaries Supplemental Financial Services Data (Unaudited) CTX Mortgage Company Quarter Ended Six Months Ended September 30, September 30, 2007 2006 Change 2007 2006 Change Originations Builder 5,445 6,429 (15%) 9,986 12,494 (20%) Retail 6,602 7,739 (15%) 14,053 16,656 (16%) Total 12,047 14,168 (15%) 24,039 29,150 (18%) Loan Volume (in billions) $2.69 $3.36 (20%) $5.46 $6.85 (20%) Average Loan Size $223,000 $237,000 (6%) $227,000 $234,900 (3%) Attachment 7 Centex Corporation and Subsidiaries Supplemental Financial Data - Debt-to-Capitalization Ratio (Dollars in millions) (Unaudited) As of As of As of September March September 30, 2007 31, 2007 30, 2006 Consolidated Debt/Capitalization (A) Debt $4,460 $5,567 $6,255 Minority Interests 96 177 475 Less Minority Interests on Lot Options (C) (78) (153) (443) Stockholders' Equity 4,164 5,112 5,097 Capitalization 8,642 10,703 11,384 Less Unrestricted Cash (100) (883) (48) Net Capitalization $8,542 $9,820 $11,336 Consolidated Debt-to- Capitalization Ratio 51.6% 52.0% 54.9% Consolidated Net Debt-to- Capitalization Ratio (D) 51.0% 47.7% 54.8% Debt/Capitalization, Excluding Financial Services (B) Debt $3,659 $3,904 $4,455 Minority Interests 95 176 474 Less Minority Interests on Lot Options (C) (78) (153) (443) Stockholders' Equity 4,164 5,112 5,097 Capitalization 7,840 9,039 9,583 Less Unrestricted Cash (81) (871) (42) Net Capitalization $7,759 $8,168 $9,541 Debt-to-Capitalization Ratio 46.7% 43.2% 46.5% Net Debt-to-Capitalization Ratio (D) 46.1% 37.1% 46.3% (A) Consolidated capitalization includes debt, minority interest (excluding lot options), and stockholders' equity, including Financial Services. (B) Capitalization includes debt, minority interest (excluding lot options), and stockholders' equity. Capitalization presented above reflects Financial Services on an equity basis and does not include debt or minority interests attributable to Financial Services. (C) Pursuant to the provisions of Financial Accounting Standards Board ("FASB") Interpretation No. 46, "Consolidation of Variable Interest Entities," as revised ("FIN 46"), the Company consolidates certain lot option agreements and records the deposit and remaining purchase price related to these options as land held under option agreements not owned with a corresponding increase in minority interests. These minority interests are excluded from the debt-to-capitalization ratio as the Company is not obligated to purchase the properties and pay these amounts. (D) Net debt-to-capitalization ratios are provided reflecting net capitalization, including net debt (debt less unrestricted cash), minority interest (excluding lot options), and stockholders' equity. We believe this ratio reflects the debt/capitalization structure in a more inclusive manner as unrestricted cash could be applied to reduce debt at quarter end. Debt-to-capitalization is a common financial ratio used in the homebuilding industry to evaluate debt capacity and leverage. Attachment 8 Centex Corporation and Subsidiaries Reconciliation of Housing/Home Building Operating Earnings (Dollars in thousands) (unaudited) Quarter Ended September 30, 2007 2006 HOME BUILDING Revenues - Housing $2,063,999 100.0% $2,601,839 100.0% Cost of Sales - Housing (1,741,203) (84.4%) (1,967,634) (75.6%) Gross Margin - Housing 322,796 15.6% 634,205 24.4% Selling, General & Administrative (296,631) (14.3%) (375,629) (14.5%) Housing Operating Earnings (Loss) (A) 26,165 1.3% 258,576 9.9% Revenues - Land Sales & Other 41,485 56,208 Cost of Sales - Land Sales & Other (927,239) (165,070) Gross Margin - Land Sales & Other (885,754) (108,862) Goodwill Impairment (61,322) - Other Income (Expense) (31,782) (979) Operating Earnings (Loss) $(952,693) (45.2%) $148,735 5.6% Six Months Ended September 30, 2007 2006 HOME BUILDING Revenues - Housing $3,838,737 100.0% $5,163,897 100.0% Cost of Sales - Housing (3,222,554) (83.9%) (3,834,145) (74.2%) Gross Margin - Housing 616,183 16.1% 1,329,752 25.8% Selling, General & Administrative (595,259) (15.6%) (752,933) (14.6%) Housing Operating Earnings (Loss) (A) 20,924 0.5% 576,819 11.2% Revenues - Land Sales & Other 70,567 143,987 Cost of Sales - Land Sales & Other (1,102,806) (269,847) Gross Margin - Land Sales & Other (1,032,239) (125,860) Goodwill Impairment (61,322) - Other Income (Expense) (51,835) 9,689 Operating Earnings (Loss) $(1,124,472) (28.8%) $460,648 8.7% (A) Housing Operating Earnings is defined as housing revenues less housing cost of sales less selling, general & administrative expenses. Housing Operating Margin is defined as housing operating earnings divided by total housing revenues. DATASOURCE: Centex Corporation CONTACT: Matthew G. Moyer, Vice President-Investor Relations, or Eric Bruner, Director-Public Relations, both of Centex Corporation, +1-214-981-5000 Web site: http://www.centex.com/

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